Tourism Minister Gari Cappelli told on Friday that the lower Value Added Tax (VAT) rate on preparing and serving food opens room for investments in increasing competitiveness, service quality and wages in the hospitality sector, adding that hoteliers have announced that wages will increase by 10% as soon as the reduced VAT rate of 13% enters into force.
"We want to assist in maintaining competitive prices and provide the opportunity for wages to increase," Cappelli told Hina and added that he had been assured by hoteliers, particularly by the head of the Croatian Tourism Association Veljko ostojic, that as soon as the reduced VAT rate enters into force, wages will be increased by 10%.
He added that the main objective of lowering the VAT rate on preparing and serving food was not for prices to be reduced but to stop the outflow of personnel and to raise quality, recalling that 30% of tourists to Croatia come for its gastronomy.
"Croatia has been recognised as a gastronomical destination, as shown by 60 restaurants recognised by Michelin, five of which carry Michelin stars," he said.
He underscored two other measures for tourism in the latest, fourth round of the tax reform which he said have not received media attention, namely non-taxation of costs of accommodation and meals for all workers as well as recreation allowances for workers outside the tourist season.
(Hina/FaH)
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