The Croatian Chamber of Economy (HGK) supports the government's decision to reduce Value Added Tax on food in the hospitality sector from the current 25% to 13% as that will open up room to increase wages for workers and make the entire tourism industry more competitive.
"We welcome this decision because until now Croatia had the highest VAT in the Mediterranean on food preparation and serving and one of the highest rates in the EU. With the recovery of the competition in Greece and Turkey, we were losing step and the situation had become unsustainable, which is why it is good that the government reacted. This is wind in the sails not just for restaurant owners but for the entire tourism sector," HGK's president Luka Burilovic said, adding that he was convinced the lower VAT rate would open room for business people to increase wages and new investments.
That will partially reduce the pressure of the labour shortage and in the end result in the budget being filled better.
"I hope that this financial relief will be directed at strengthening cooperation between restaurant owners and local producers so that we can have an additional multiplying effect and strengthen the economy," Burilovic underscored.
The president of the Association of Travel Agencies, Boris Zgomba, also believes that this is a step in the right direction. "We are satisfied with this move, primarily because it is heading in the direction of increasing the tourism sector's competitiveness. However, this is just the first step and there is still a lot of work ahead of us," Zgomba said.
The lower VAT rate on the preparation and serving of food will finally enable competitiveness compared to neighbouring countries, the Croatian Chamber of Crafts (HOK), the Croatian Tourism Association and the Coordination of Croatian Caterers said.
Representatives of tradesmen and caterers thanked the government, the prime minister and the tourism minister, saying that they had advocated the lower VAT rate the entire time.
(Hina/FaH)
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