At a press conference held today, Finance Minister Fatmir Besimi, together with the Directors of the Public Revenue Office Sanja Lukarevska and the Customs Administration Slavica Kutirov presented the adopted amendments, noting the importance of fast reaction from  all institutions involved in the process of adoption to ensure their start to be applied, after last night's adoption by the Parliament.

The Minister pointed out that with these amendments stipulate 0% VAT for basic food products, 5% VAT for electricity throughout 2022, 10% preferential rate for fuels and reduction of the excise duty on fuels for 1, 2 or 4 denars per liter, in accordance with the stock market trends.

Finance Minister explained that the reduced VAT rate for basic food products from 5% to 0% will be applied until the end of May, and shall apply to bread, sugar, flour - type 400, sunflower edible oil, permanent milk with a fat content of 2.8%, 3.2% and 3.5%, fresh meat, rice and eggs. With this measure, the Minister emphasized, there will be a downward pressure on the retail prices of these products, which will have an effect on reducing the consumer price index, and in order to have a more significant effect, this measure will be applied together with the price freezing measure for in these products. The fiscal implications of this measure are 430 million denars.

Continuation of the application of the 5% VAT preferential rate on electricity for households until the end of 2022, was a measure that was adopted last year to protect the living standards of citizens by mitigating the price shock from the rising price of electricity in the world stock exchanges. The Minister said that the value of this measure is 2.7 billion denars annually.

He added that the Government recommend introduction of block tariffs, in order to achieve a lower price of electricity for smaller consumers, to ensure greater energy efficiency and lower costs for low-income households.

The measure to reduce the VAT rate from 18% to 10% on energy resources, i.e. unleaded gasoline, gas oil, liquefied petroleum gas and methane is aimed at protecting the final consumers, but also small farmers. The measure has fiscal implications of about 400 million denars.

An additional impact on the price of fuels will be the reduction of the excise duty by 1, 2 or 4 denars. "This," said the Minister, will directly affect the retail price of these fuels, by about 1.2 denars, or 2.3 denars, or 4.7 denars, according to stock market trends. The value of this measure is around 900 million denars.

Additionally, the VAT on energy import is abolished, which shall improve the liquidity of the economy.

Pointing out that the global price crisis is a reality, Besimi said that we should all be aware of the situation and act responsibly, both the government institutions, and the citizens and traders.

"What the government needs to do - we are doing. We have adopted measures worth 400 million Euros to mitigate the pressures on the standard of citizens and the economy and as you can see we are rapidly putting them into operation, said the Minister who added that the legal solutions define how these measures will be implemented and provide a quick response and reaction from the institutions in the future.

He called to the citizens to be energy efficient and not to trust fake news.

- We are facing, he said, another challenge, but as we all managed to overcome other, I would say greater challenges, we will overcome this one as well. "Only responsibly and jointly."

He assessed that the situation with the Russian-Ukrainian crisis is uncertain, but there are also positive expectations - the European Central Bank expects the Euro-zone to grow this year, while inflation to remain moderate, single-digit rate, which is good news for our economy given its exposure to European economy.

The Director General of the Public Revenue Office, Sanja Lukarevska, said at the press conference that the Public Revenue Office, in the past, together with all stakeholders in the society, worked dedicatedly on the tax-related measures.

"In that direction," she said, "we reduced the preferential VAT rate for: bread, flour, sugar, cooking oil, milk, rice and eggs, which directly affects the final price that citizens have to pay for basic food products." We have completely exempted these products from VAT. "With this measure, we save money for the citizens and that way we preserve our standard of living," said Lukarevska.

The Director General of the Customs Administration Kutirov referred to the implementation of the measure related to the reduction of excise duty, emphasizing that this measure will be implemented immediately after receiving information from the Energy Regulatory Commission.

"The measure to reduce excise duty based on the average stock market price brings additional reduction of energy duties: diesel, unleaded gasoline 95 and 98, gas oil (extra light heating oil). The reduction of the excise will be 1, 2 or 4 denars depending on the average stock exchange price set by the Energy Regulatory Commission. The determination of the amount of excise duty will be done twice a month, and will be applied on the 1st and 15th of the month. The measure will be valid until 31.05.2022, said Kutirov.

The set of measures adopted by the Government is estimated at 400 million Euros, which means giving up on 100 million denars of planned budget revenues and 300 million denars of budget expenditures. This, as it was pointed out at the press conference, will be realized as planned.

     

     

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