The head of the Independent Croatian Farmers (NHS) association, Mato Mlinaric, said at a press conference in the eastern city of Osijek on Wednesday that the government and the Finance Ministry should consider the possibility of reducing Value Added Tax on food to 10%.
Mlinaric said that farmers in some EU countries, such as Austria, enjoyed "hidden" subsidies in the form of a lower VAT rate, where the VAT rate was 20% and VAT on food was 10%.
This means that producers who are not subject to VAT earn a 10% higher profit which they do not pay back to the state, so it would be good if Finance Minister Slavko Linic considered this option, he said.
Our proposal has been that VAT on food should be lower, namely 5%, but since it is mostly 10% in the EU it would be good if this possibility was considered so that small food producers who are not subject to VAT have the same chances as European farmers, Mlinaric said.
Mlinaric said that the government should decide whether food production and self-reliance on food production were its priorities. "I think we can be on par with European producers, but that requires political will," he noted.
