Skopje, 30th April 2014 (MIA) – Government reached decision on decreasing the Value Added Tax rate on baby products, school supplies, fodder, fodder additives and livestock.

As Prime Minister Nikola Gruevski said at the press conference, the Government, at today’s session, accepted the Draft Law on Amendments and Modifications to the VAT Law, by which the rate at these products reduces from 18% to 5%.

New legal solution is expected to enter into force following both the establishment of the new parliamentary composition and the adoption of the decision in the Parliament, which we expect to be realized at the end of May or during June. Fiscal implications to be caused by the legal solution will amount to Denar 380 million on annual basis or half of this amount for this year, since there are six months remaining – Gruevski said.

He stressed that the reduction of VAT on these products will cause reduction of the tax paid by sellers, due to which, it is expected for this to contribute to price reduction for the final beneficiaries.

This will help the parents in reducing the costs for their children. The amendments will have additional effects over the prices of fodder and livestock, which will encourage the agricultural production of meat and milky products, and it will also enhance the competitiveness of Macedonian business sector through the decreased prices, Gruevski said.

This, as he pointed out, will directly or indirectly reduce the cost price of the products and will improve the competitiveness of the companies that produce them.

This can be also an incentive for boosting export of these Macedonian products, as well as enhancing competitiveness of the market with the imported products. This will directly help Macedonian companies producing such products, as well as consumers since it will provide for cheaper price of the final products, Gruevski said.

When asked what will be the consequences of SDSM’s decision to return the MP mandates won at the elections, Prime Minister Gruevski said that that was a harmful decision for both the country and the political party reaching this decision. This political party has still time to reconsider the decision up to the establishment of the Parliament, Gruevski said.

Also available in: Macedonian

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