The Chairman of the Parliamentary Committee for Economy, Finance and Budget and Social Democrats (SD) MP, Boris Mugoša, proposed reducing the value added tax (VAT) on accommodation services in tourism from 15 to 11 percent and for the measure to be valid for a year.
At the meeting of the Committee on Economy, Finance and Budget, held on Thursday, he said that he was proposing the measure for a year in order to see its effects on accommodation prices, turnover, and the number of overnight stays.
Mugoša wrote on his X account that at the end of last year, without adequate analysis, the VAT rate on accommodation was increased from seven to 15 percent, an increase of 113 percent, which created additional financial pressure on the tourism industry, reduced the already vulnerable competitiveness of our destination due to a number of infrastructure problems and contributed to the slowdown in tourism growth.
He said that, according to the assessments of relevant institutions, the aforementioned increase in the VAT rate has affected the deterioration of the business environment index in the tourism sector, which is at the lowest level since assessments were made, including even Covid 2020.
Mugoša stated that the VAT rate of 15 percent is the third highest in Europe, and significantly higher than the VAT rate on accommodation in destinations that are competitors to our country.
Mugoša said that the reduction in the rate is expected to correct accommodation prices, and the result would be greater turnover, i.e. more money in the state budget, as well as a reduction in the shadow economy.
"That is why I proposed that the aforementioned VAT rate correction be valid for one year, in order to realistically assess the effects of this measure," concluded Mugoša.
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