VAT falls for basic products in Kosovo

VAT falls for basic products in Kosovo

Pristina, 1 September 2015/Independent Balkan News Agency

By Elton Tota

Government of Kosovo has decided to reduce Value Added Tax on a number of raw materials and basic products, in order to make them more affordable for people in need.

As of today, 1 September 2015, an 8% VAT will be paid on all essential products, as opposed to16% which was before.

General Director of Taxation, Nahit Sharku says that the Taxation Directorate is getting ready to apply the different levels of VAT.

According to him, the new VAT bill has two effects. “In general, it will have economic and social effects. In the economic aspect, it helps businesses, as they will not pay VAT on machinery and raw materials, while the rest has to do with the reduction of VAT from 16% to 8%”, Sharku says.

Meanwhile, economy experts say that the effects of the new tax package are not expected to be immediate for businesses and citizens.

The head of the Center for Strategic and Social Studies, “STRAS”, Ibrahim Rexhepi says that the fact that VAT is being categorized in different levels is a welcomed measure, if it’s applied in compliance with the law and if this is reflected in price cuts.

“But I’m doubtful that this will be achieved, at least not to that extent that citizens are expecting. First of all, they must be clear about the fact that there will not be a very big fall for many products, as inputs for which 18% VAT is still applied, have an impact on them. Businesses, on the other hand, may also not apply the new VAT rate, but authorities must insist in order for the low VAT rate to be applied”, he says.

Meanwhile, officials from the Ministry of Finance say that the new measures have been put in place in order to support the economy of the country and the citizens. /ibna/