Medicaments and diapers will be cheaper?

Posted by bara 16/06/2014 at 11h36

A change of the tax system comes with a new government. Planned changes in seemingly positive direction - goods and services will be cheaper. It depends on a margin of retailers and also on the development of individual markets. The design of the convergence program for the European Union prepared by the Ministry of Finance counts with three rates of value added tax. The coalition parties have agreed to reduce VAT on medicines, books, nappies and baby food irreplaceable from 15% to 10% from the beginning of next year. At present the VAT rate is set to 15 and 21 percent. These tax rates should be reduced by 1 percentage point. The reduced rate of 14 percent should be for food, water, heat and transport. The rate on other goods and services will be 20 percent. It has also been proposed to unify these two rates to 17.5 percent. In addition to the five per cent reduction in value added tax medicines, books, diapers and baby food but yet everything else in a negotiation depends on whether these proposals manage to push through parliament.
These products should be cheaper by about 4 percent. In the business sector, however, changes in the VAT rate mean confusion and administrative burden. Chamber of Commerce long criticized the constant change of rules that very burden and prevent long-term business planning activities. In addition, some economists criticize the tax cuts that have not been in a period of recession, but now in a period of mild economic recovery, which may mean unnoticeable lower prices for consumers, increase margins and thus profits of retailers and especially noticeable decrease in the state budget. It means 16 million which could be missing in the state budget. Increase the tax credit for the second and each additional child. It is also in negotiations the government.
Now people apply the tax credit to 24 840 CZK per year per taxpayer. In the case of children's tax credit CZK 13,404 per year. Ministry of Finance propose increase annual tax discounts for second and each additional child CZK 14,604 per year. All these changes must be approved by Parliament and we can wait for the final coalition agreement.

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