Croatian ministers disagree on lowering VAT on natural gas

Lowering the VAT on natural gas will affect budget revenues at a time when Croatia is trying to meet the Maastricht criteria for entering the eurozone on January 1, 2023. [Hrvoje Gradecak / Shutterstock]

New and higher natural gas prices for most households should enter into force after 1 April on the basis of the Croatian regulatory framework. Prices could be €500 per year more expensive.

Asked how the government would respond to the anticipated increase in gas prices, Economy Minister Tomislav Ćorić said in an interview with the central news broadcast on Croatian Television that a lower VAT rate on gas supply would definitely have a significant effect.

“In addition to the current standard rate of 25% on the supply of gas, there are two lower rates, of 13 and 5 percentage points, and (lowering the VAT rate) would definitely help make the gas price increase as of 1 April lower,” he said.

Deputy Prime Minister and Finance Minister Zdravko Marić will have the final word.

Marić is expecting the European Commission to revise its inflation forecasts. Croatia has based its preparations for the 2022 budget on the projected inflation rate of 2.5% for the whole year. The latest estimates show that the country is close to the average inflation rate of 3.5% for the whole of 2022, and later much will depend on gas and electricity prices, Marić said.

Lowering the VAT on natural gas will affect budget revenues at a time when Croatia is trying to meet the Maastricht criteria for entering the eurozone on 1 January, 2023.

Ćorić was asked during an interview if prices were being raised under the guise of inflation ahead of the euro changeover. He explained the situation with price growth on the global market, which was spilling over to the production process and consequently impacting prices.

(Željko Trkanjec | EURACTIV.hr)

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