Tourism Minister against Proposed Tax Changes for Hospitality Services?

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Tourism Minister Cappelli reportedly does not support Finance Minister’s proposal to increase VAT rate for restaurant and catering services.

Representatives of restaurateurs and caterers met on Thursday with Minister of Tourism Gari Cappelli after the Finance Ministry announced its plans to increase the VAT rate for restaurant and catering services from 13 to 25 percent. According to the representatives, the conclusion of the meeting was that VAT must not be allowed to increase, reports Večernji List on November 4, 2016.

Caterers and restaurateurs were represented at this meeting by president of the Croatian Chamber of Trades and Crafts Dragutin Ranogajec and president of the Guild of Caterers and Workers in Tourism Nenad Šepak, who announced that the Minister supported their demands that the VAT rate must not be increased.

Noting that the main topic of discussion was the tax reform, primarily with regards to the increase in the VAT rate on catering and restaurant services, preparing and serving food and drinks, from the current 13 to 25 percent, Šepak added that they had also discussed the Tourism Development Strategy for the period until 2020.

“The strategy was drafted by the Ministry of Tourism and the Ministry of Finance and adopted unanimously in Parliament as a strategic document. Among other issues, it includes a lower rate of VAT, better competitive environment and encouraging investments in the hospitality and tourism industries. But, now the VAT rate is being increased and the implementation of that decision would have a direct impact on further development of tourism and on tourism results in the next several years which, given the importance of tourism for Croatia’s economy, clearly means that such an outcome would have devastating consequences for tourism and national economy as a whole”, said Šepak.

He reiterated that the conclusion from the meeting with the minister was that “if the VAT rate cannot be reduced at this moment, it certainly should not be allowed to be increased”. Similar conclusion after their meeting with the Tourism Minister was conveyed by representatives of the hoteliers’ association as well. According to unofficial sources, by the end of this week the Minister is scheduled to also meet with representatives of several other industry associations, which are almost all against the increase in VAT rates for restaurant and catering services.


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