A new draft matrix for VAT rates intended to clear up bizarre anomalies was released on Friday by the Ministry of Finance.
Conditions for the reversal of the 2011 “temporary“ increase of VAT rates from 7.0 to 8.0 percent and 22 to 23 percent have been set in new draft...see more
Fresh rolls: five percent VAT; toasting bread 8 percent; longer life bread 23 percent. Apples five percent, pineapples 23 percent.
The current regulations on what tax rate is paid on which goods, is a labyrinth for retailers and wholesalers and leads to distortions of prices in the shops. Why, for example, have child seats been taxed at 23 percent?
The new matrix, which the Finance Ministry unveiled on Friday before its journey through the legislature, is not the first attempt to devise a system to simplify this situation but it is the first to make it onto paper. The idea is that goods which are classed in the same categories will be treated in the same way: all bread will be taxed at five percent, as will all fruit.
Cheaper dummies and nappies
“Now all items for children such as dummies, nappies and car seats, will be taxed at five percent, as will women’s hygiene products.,” Finance Minister Teresa Czerwińska clarified yesterday.
However, the new rules will not mean that all prices will go down. Some will be put in higher taxation categories, such as octopus and oysters which will now be 23 percent, instead of five percent.
The lack of clarity in the previous rules has led to many expensive court cases. It is hoped that the new rules, which, if passed, will come into effect from 1 January, will be easier for businesses to adhere to. No doubt, however, certain oddities will remain.