VAT increase in most products and services

More tax charges for all and exemptions for few; this is what the ministerial council decided tonight, Thursday, and they will be implementing such decisions pronto so that they will be effective as of January 1st, 2011.

The bill includes these new regulations:

- increase of the diminished VAT rate from 11% TO 13% and the extra diminished one from 5,5% to 6,5%

- VAT decrease for medicine and hotels from today’s 11% to a new extra diminished 6,5%

- suspension of the investigation of income tax for the purchase of primary residence with an objective value up to 200,000 euros

- simplification of the handling system of heating oil by eliminating the payment of the increased fuel EFK during customs clearance by the oil providers

- reduction of tax on electricity for domestic use (from 5 euros/MW/h to 2,2 euros/MW/h), increase of business invoices beyond high voltage (from 2,5 euros/MW/h to 5 euros/MW/h) and full tax exemption on electricity consumption for agricultural use. This arrangement is compensatory in the reform of electricity tariffs

- reduction of the EFK rate on tobacco from 67% to 65% and increase of the fixed point from 10% to 15%