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Information Note on VAT


A few months ago, the President of the Republic, in his capacity as head of the executive branch, submitted a proposal to Parliament to amend the VAT Code, essentially in the area of the tax rate. In fact, instead of the 14 per cent currently applicable, the Executive's proposal is to reduce the rate to 7 per cent, applicable to around 658 food products. The proposal is justified as a measure to ease the cost of living for families and stimulate the economy.


In the specialised debate, MPs considered that some products should benefit from a greater reduction than the Executive's proposal, in the order of 5% or even zero VAT. For this reason, the proposal was sent back for reconsideration by the Executive.


The proposal to amend the VAT Code will return to the specialised debate for its final overall vote, which experts say should take place shortly after the opening of the new legislative year, constitutionally scheduled for 15 October.

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