The government has submitted to parliamentary procedure a proposal to amend the VAT Act, which relates to the extension of the reduced VAT rate until the end of March 2025 on the supply of natural gas, fuel wood, and heating from heating plants, and according to the Prime Minister, the proposal is ‘de facto’ part of a future package of measures to assist citizens.
– The amendment to the Value Added Tax Act is proposed with the aim of extending the application period of the reduced VAT rate of five percent on the supply of natural gas, fuel wood, pellets, briquettes, and chips, as well as heating from heating plants, including fees related to these supplies. The period is extended until March 31, 2025 – emphasized Finance Minister Marko Primorac at Thursday’s government session.
We believe that in this way we will contribute to maintaining stable, lower prices of these energy sources for our citizens, the minister added.
As stated in the government’s draft amendments, the proposal must be adopted in an urgent procedure to enable the extension of the application of the reduced VAT rate of five percent and thus maintain the current level of tax relief and mitigate the impact on prices, thereby avoiding a potential price increase that citizens and the economy would face.
– This proposal is ‘de facto’ part of a future package of measures that the government will adopt in March for the benefit of our citizens and the economy, as it has been so far – emphasized Prime Minister Andrej Plenković.
The government estimates that the proposed measure will impact the reduction of state budget revenues from VAT by approximately 46 million euros annually, or a reduction of 34.5 million euros for the period from April 1 to December 31, 2024, and a reduction of 11.5 million euros for the period from January 1 to March 31, 2025.
