Despite the higher VAT rate, the Tax Administration says the revenues are disappointing.
“The data from the fiscal receipt systems doesn't reflect wider macroeconomic indicators,” says the Tax Administration's warning regarding the tax revenues from this year's tourist season, reports Index.hr on October 9, 2017.
In a special presentation prepared ten days ago by the Tax Administration for Minister of Finance Zdravko Marić, it was reported that the analyzed data indicated that, during the tourist season, the system of fiscal invoices did not register the expected number of invoices and that the total amount on the invoices received was lower than expected.
The Ministry of Finance is very disappointed with the data, given that other indicators on this year's tourist season are much better than those for the last year. Likewise, it seems that the amendments to the Law on Fiscalization in Cash Transactions, which came into force on 1 July this year, did not bring the expected results.
However, the greatest dissatisfaction has been caused by the fact that the change in the VAT rate for cafes and restaurants did not bring in the expected amount of tax revenues. At the beginning of 2017, the VAT rate has increased from 13 to 25 percent for bars and restaurants, as part of the tax reform implemented by Finance Minister Marić.
The change in the VAT rate has caused a wave of dissatisfaction among bar and restaurant owners, who have evidently taken advantage of a legal opportunity to avoid VAT payments prescribed by law. They started setting up new businesses, usually simple limited liability companies (JDOO), to stay below the tax threshold. In theory, they could continue like this forever, provided they establish a new company each year, since newly-established companies are not required to become part of the VAT taxpayer database for the first year of operations.
According to the presentation, the Tax Authority will track who among the cafe and restaurant owners have founded new JDOOs in order to avoid paying the VAT.
The Ministry of Finance hopes that an increase in the number of fiscal inspectors will correct this “anomaly.” Namely, according to the new organisation of activities, there will be 101 positions for fiscal inspectors, while currently there are 93 such officials.
Earlier this year, there were rumours that tax revenues from catering services were lower than expected, but the government denied it at the time. The rumours were obviously true.
Translated from Index.hr.
