Kamenicky: Gov't Agrees on Higher Support for Gastro Sector through Lower VAT

Bratislava, September 18 (TASR) - The government at its session adjusted the package of measures to consolidate public finances in order to support the gastronomy sector more through lower value-added tax (VAT), Finance Minister Ladislav Kamenicky (Smer-SD) announced following the government session on Wednesday. This support will cost an additional €110 million. The money for it should be gained through a higher tax on financial transactions and corporate income tax. "We've agreed that we want to boost support for the gastronomy sector. A possibility of reducing VAT for the sector of accommodation to 5 percent was under discussion as well. Here we'll return to 23 percent, but we'll support the gastronomy sector. We want to reduce VAT on the food in restaurants to 5 percent," said Kamenicky. Soft drinks in catering facilities should be subject to the same VAT as when purchased in a store, namely 19 percent. A basic VAT rate of 23 percent will apply to alcoholic beverages in restaurants and shops, said the minister. "This package represents a shortfall of some €110 million. As I've already announced, the total consolidation will amount to €2.7 billion, and we must adhere to it in order to comply with the deficits and the rules set by the European Commission," stressed Kamenicky. The minister mentioned two sources to be deployed to make up for the shortfall. The increase in the parameters of the tax on financial transactions should bring in an additional €80 million. While the original proposal counted on the tax at the level of 0.35 percent, it will be 0.40 percent in line with the new one. The maximum limit of this tax will be increased from €30 to €40. An additional €30 million should be gained by expanding the range of companies that will be a subject to a higher (22 percent) corporate income tax. Originally, it should have applied to companies with a taxable income of over €5 million, while it will be €1 million in line with the new rules. ko/mcs