Although the new tax reform promised us higher wages, we could easily lose the difference with just one trip to the grocery store. A new increase in the price of dairy products, as well as meat products, is threatening. In order to avoid further price gouging, manufacturers are asking the Government for a uniform VAT rate of 5 percent on food, writes RTL.
Cheese, cream, yogurt are simultaneously too expensive for customers and unprofitable for producers. The state, they say, takes everything they earn.
“The VAT on milk is 5 percent, on raw materials it is 13 percent, and on the product that goes outside it is 25 percent. This VAT of 25 takes away all the profit from production, and we live from processing,” says Darko Pavičević, the manager of the dairy and livestock farm. cooperative Products of the village
Manufacturers of dried meat products say that they are no different.
“At this moment when we look, the state earns more than the industry earns, because the meat industry cannot make a margin of 25 percent while the VAT is 25 percent,” Milivoj Medven, director of the meat processing industry, tells us.
The only solution would be a uniform VAT rate of 5 percent on all food.
“Everything is a mess. 5 percent VAT would allow us not to raise prices further. “Prices would certainly not rise here,” Pavičević claims.
However, it is hard to believe because the situation from April last year, when the VAT on butter, fresh meat, fish, fruit, vegetables, and eggs was reduced, ultimately did not bring lower prices on the shelves. The citizens did not profit, and neither did the state, which, according to the Tax Office, lost almost 280 million euros due to the lower VAT. In order for the citizens to benefit, it is necessary, according to the entrepreneurs, to make a complete reform.
“If you raise the VAT entry threshold from EUR 40,000 to EUR 80,000, if you reduce the income tax, adequately – and not transfer it to local self-government units, if you go with the reduction of VAT on service activities to 13 percent, that is, food production to 5 percent, at that moment you can expect prices to stabilize,” says Hrvoje Bujas, president of the Voice of Entrepreneurs association.
No matter how much the food tax is, many citizens have to make it through the month in the red. And that, it seems, is never more difficult.
“I also think that if the VAT was reduced, the prices would not be lower. Nothing would be lower,” Tifa Žižić from Zaprešić is pessimistic. Her fellow citizen Marina Topić agrees.
“Everything is terribly expensive, and a reduction in VAT would benefit everyone. For example, in Luxembourg they don’t have VAT”
With a VAT of 25 percent, producers say, a complete imbalance has been created in the competitiveness of domestic and imported products, while at the same time in Poland, domestic production is protected with a 0 percent VAT rate on food.
“There has been a global increase in the price of meat and there is slowly a shortage of meat on the market. “Meat prices have skyrocketed and the current VAT of 25 percent has a strong impact on the price of cured meat products and we are becoming uncompetitive on the shelves,” explains our interlocutor Medven.
“If you reduce VAT from 25 percent to 5 percent, a certain reduction is possible and could be, but ultimately the primary goal is to keep Croatian production at a profitable level, which is currently not the case,” believes Bujas.
However, in case the VAT rate remains the same – manufacturers are clear
“In the fall, everything will go up in price, as far as food is concerned, especially vegetables and fruits. “Vegetable production or milk production is in the same basket,” says Pavičević.
And the bill, as always, will be paid by the citizens, writes RTL.
