6th October 2023, Skopje – Commodities, which are part of the daily use of citizens, will continue to be taxed at the lowest VAT rate, i.e. it remains to account for 5% as foreseen under the Value Added Tax Law and more closely defined by the Decision on Determining the Goods and services Subject to a Preferential VAT Rate, which the Government adopted on 28th September, entering into force as of today. Adopted decisions will not impact the increase in the final price of commodities.
The list remains to be lengthy, being the most extensive one in relation to the countries in the region and the EU Member States, and the purpose of adopting the decision on applying 5% preferential tax rate on certain products is aimed at safeguarding the living standard of the citizens, protecting the health of the citizens, as well as taxing the products that are part of the basic human nutrition, at a fair tax rate.
Decision covers over 1600 products, which will be further taxed at the lowest 5% tax rate as per the new Decision, those being the following: meat – beef and pork, butchery products in brine, smoked and dried, fish – trout, carp, other freshwater fish, hake, milk, sour cream, curdled milk, yogurt, kefir, cheese, most types of yellow cheese, butter, eggs, natural hone, gizzards, vegetables and fruits, dates, figs, citrus fruits (oranges, lemons, tangerines, grapefruit), wheat flour and grain flour, wheat, barley, rye, rice, corn, soybeans, peanuts, sunflower oil, olive oil, corn oil, margarine, sausages and other canned meat products, canned fish – tuna, sardines, sardines , sprats, sugar, cocoa powder, pasta, bread, biscuits, ajvar, canned cucumbers and gherkins, sauerkraut, canned mushrooms, sweet peppers, jams and sweets, ketchup and other tomato sauces, soups, vinegar, salt, nuts, chestnuts…
The list includes, among other things, seed material, fertilizers, agricultural equipment and machinery, also supplemented by menstrual products, with the 5% tax rate remaining on the sale of heating pellets.
Hence, the list of products that will be taxed at a preferential rate of 10% includes those not being part of the everyday basic nutrition, while some of the products are not even recommended for the human health,
such as: various salmon products, goat meat, special rare types of tuna, which are not commonly used, almonds, cashews, Brazil nuts, tropical fruits, certain types of spices, palm oil, caviar, a special type of yellow cheese, which do not belong to the traditional type of products, being of plant origin, and similar, Supplemented list is geared towards protecting both the domestic production and the economy.
The amendments made cover the wide tax reform, as part of the process of harmonization with the EU Aqcuis, as per the EU recommendations and the International Monetary Fund, all to the end of attaining greater fairness, righteousness and protection of the living standard of the citizens. Proposed list as part of the inclusive process conducted to set up a new tax concept was shared with all stakeholders and published on the MoF’s website, thus being available to the public for a long period of time.
The application of these two Decisions does not affect the Government’s decision to freeze the commodity prices since the products covered by the Government’s decision are part of the list with a preferential tax rate of 5%, with no change made thereon.
Republic of North Macedonia remains to be a country with the lowest VAT tax rates (regular and preferential), whereby the overall human food will continue to be taxed at a preferential VAT rate, whereby most of it, i.e. the commodities, will continue to be taxed at a lower preferential rate of 5%.