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Government: VAT Rate to Rise to 20 percent as of Next Year
Wednesday 22 September 2010 Zoom in | Print page
Bratislava, September 22 (TASR) - The basic VAT rate will rise on a temporary basis from the current 19-percent flat rate to 20 percent as of next year, while the 6-percent VAT rate for produce sold from farms will be abolished, the Government decided on Wednesday.
The VAT increase is part of the Government package designed to restore the health of public finances. The public-finance deficit is expected to reach almost 8 percent of GDP this year. The VAT rate will return to 19 percent after the public deficit is squeezed below 3 percent of GDP, which is forecast for 2013 at the moment.
It is expected that the 1-percentage point increase in VAT will increase tax revenues by €185.5 million in 2011, €196.3 million in 2012, and €209.3 million in 2013.
In total, the 2011 deficit should be reduced by €1.7 billion, with measures aimed at revenues projected to contribute €770 million of the aforementioned figure.
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