Kosovo’s government reduces VAT on basic products

Kosovo’s government reduces VAT on basic products

Pristina, March 24, 2015/Independent Balkan News Agency

By Elton Tota

Government of Kosovo approved today a number of bills which aim at reforming the entire tax system in Kosovo.

The government will reduce VAT from 16 to 8% for basic products such as bread, salt, oil, water supply and electricity. VAT will also no longer be applied on the production line and information technology.

Kosovo’s PM, Isa Mustafa said that the Finance Ministry is working to reform the taxation system which aims at creating a more favorable business environment and to enable an equal distribution of tax burden.

The head of the government said that in order to reflect all these changes, amendments have been made in laws such as the law on value added tax, on corporation tax and law on personal incomes.

Mustafa said that the government will also examine the list for customs relief, which aims at reducing investment costs.

Meanwhile, Finance Minister, Avdullah Hoti said that some of the main changes taking place consist of the reduction of VAT threshold from 50 thousand to 30 thousand Euros, which will integrate another 1800 businesses in the VAT regime, thus increasing formality and reducing informal economy.

Hoti said that it has also been decided to introduce a 10% tax on gambling. The government also approved the draft document on the domain of public procurement, which foresees a deep reform in procurement, being replaced by an electronic procurement. This meeting also examined the financial report for 2014, where it was said that the aim was to strengthen financial discipline in spending public money. /ibna/