BRATISLAVA, October 30, (SITA) -- At its regular session on Wednesday, the cabinet passed the bill on value-added tax (VAT), which is set to increase the lower VAT rate from the current 10 percent to 14 percent and reduce the basic VAT rate from 23 percent to 20 percent from next year. Finance Minister Ivan Miklos said after cabinet talks that it will only be an approximation of two tax rates and no items will be switched from the lower to basic tax rate.
Building and construction works, cargo transport, and restaurant services, should thus remain in the lower VAT tax rate. Leaving construction works, cargo transport, and restaurant services in the lower tax rate should, according to Mr. Miklos, relieve negative consequences on the construction industry and tourism. He assumes that after Slovakia joins the European Union in 2004 a unified VAT rate would be introduced. The unified VAT rate should range between 16 and 18 percent. The minimal VAT rate in the EU is 15 percent, while a ceiling rate has not been set.
An increase in the lower rate to 14 percent instead of the originally planned 13 percent will have a neutral effect on the state budget. Changes in VAT rates should increase budgetary revenues by SKK 8.3 billion next year.
(EUR 1 = SKK 41.662 on October 30)