For a little more than 15 days, restaurateurs and hoteliers will not have the privilege of paying a lower value added tax (VAT) of seven percent on the services of preparing and serving food, drinks and beverages, except for alcoholic beverages, carbonated drinks with added sugar and coffee, they will already pay that duty to the state at a rate of 21 percent.
As a measure to support restaurateurs and hoteliers during the corona virus pandemic, the Government reduced the VAT on their services from 21 to seven percent, and with the latest amendments to the VAT Act from January this year, this relief is valid until December 31.
In the next year's budget, the government projected a higher income from VAT due to the return of the general rate of 21 percent on catering.
President of the Chamber of Commerce Nina Drakić sent the initiative to the Minister of Finance Novici Vuković to amend the VAT Law and to maintain this privilege in the following year. "Vijesti" has access to that memo.
"At the meeting of the Committee for Tourism and Hospitality of the PKCG, which was held on November 28, tourism officials considered information regarding the application of the provisions of the VAT Law. It is about Article 71h, which stipulates that the reduced rate of VAT on the preparation and serving of food, beverages and beverages, except for alcoholic beverages, carbonated beverages with added sugar and coffee, in all facilities for catering services shall be applied until December 31 this year. A significant contribution to the initial stages of the recovery of the tourism industry after Covid was made possible, among other things, by this measure, which implied the application of a lower VAT rate than the application and servicing of the mentioned products", said Drakić.
She further stated that, with the amendments to the VAT Act in January 2023, a restriction on the application of this measure will be introduced from 31.12. In 2023, and according to the representatives of the tourism industry, this tax benefit can only be used for restaurants and food delivery.
"Therefore, the delivery of food (catering) is stimulated, and the sale of food in hotels and other catering facilities is discouraged, which further threatens the business environment, especially when it comes to the development of elite tourism. In such a business environment, with high prices of food products, restaurateurs and hoteliers cannot create competitive prices for the end guest," said Drakić.
In accordance with the above, as he states, they are once again submitting the initiative to amend Article 71h of the VAT Law to remain in force after December 31, 2023.
"Therefore, to continue applying the lower VAT rate to the preparation and serving of food, beverages and beverages, except for alcoholic beverages, carbonated beverages with added sugar and coffee, in all facilities for the provision of catering services, without any limitation regarding the period of application, with the aim to provide long-term tax benefits to the tourist and hospitality industry," writes Drakić in a letter to the minister.
"Vijesti" is waiting for an answer from the Ministry of Finance as to whether they will amend the VAT law and keep this relief for restaurateurs.
They expect 172 million more from VAT in 2024 compared to 2023.
According to the Draft Law on the Budget for 2024, VAT revenue is projected in the amount of 1.199,6 billion euros or 17,1 percent of GDP, which is 171,6 million or 16,7 percent more than this year's rebalancing. .
"Revenues from VAT are planned in accordance with the projections of the growth of household consumption and imports according to the macroeconomic scenario, as well as in accordance with the implementation of the Action Plan to combat the gray economy. Also, in the medium term, the effect of increasing this category of income is planned in accordance with the return of the 21 percent VAT rate in the hospitality industry," the Budget Proposal states.
In the budget for the next year, the government projected a higher income from VAT due to the return of the general rate of 21 percent on catering
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