Croatian finance ministry willing to talk with hospitality sector

"We are prepared for talks," said Finance Minister Zdravko Marić, but noted that he had not seen this happen in any other country and that EU directives do not allow anything to be exempted from the VAT base, including labour costs. [Shutterstock/Gaspar Janos]

Cafe and restaurant owners on Tuesday called on the government to reduce VAT on beverages to 13% or to treat labour costs as a tax deduction, which would help the hospitality sector to recover, develop and increase wages.

Business owners insist that this is important due to low wages and labour shortage in the country and abroad. The group also appealed to the national COVID-19 team to allow cafes to work indoors too because it is not clear why they can operate outdoors but not indoors in light of Europe’s drive to open up.

“We are prepared for talks,” said Finance Minister Zdravko Marić, but noted that he had not seen this happen in any other country and that EU directives do not allow anything to be exempted from the VAT base, including labour costs.

Asked whether VAT would be reduced to 13% for the hospitality sector, Marić said “the dialogue will continue, the approach and expectations of caterers are in order for me however, we cannot single out one segment in comparison to the overall picture.

“VAT is exceptionally important, the most important tax revenue. We resolved some outstanding issues with changes to taxes, but taxes cannot solve everything. By the same token, VAT isn’t the only item in the tax system in Croatia,” he added. 

(Željko Trkanjec | EURACTIV.hr)

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