Government reduces VAT in Macedonia
06/09/2007
As part of its effort to raise living standards, the Gruevski administration has lowered the VAT on medicines, computers, software, solar panels and public transportation.
By Marina Stojanovska for Southeast European Times in Skopje - 06/09/07
 Prescription costs are expected to fall as a result of the VAT reduction. [Getty Images] |
The Macedonian government has decided to cut the VAT on several categories of products from 18% to 5%. The reduction applies to drugs, selected medical goods, computers, computer software, solar panels and public transportation.
"With a lower VAT, we are taking a new step in realising our election promises," said Prime Minister Nikola Gruevski. "We have found a way to increase the budget and strengthen the economy."
Immediately following the statement, wholesale pharmacies announced lower prices. "The government's move is to be welcomed. Drug prices will be cheaper by 10%," said Blagoja Mehandziski, the managing director of one of Macedonia's leading wholesale and retail chains, Zegin.
"Lowering the VAT from 18% to 5% will positively affect prescription prices," said the director of the Bureau for Medicines, Ilco Zahariev.
The VAT reduction should also make personal computers, computer software and solar panels more accessible for purchase by Macedonians.
In an effort to protect the environment, the government aims to trim the price of panels to encourage their use. Although Macedonia has long periods of sunshine, solar panels have been rarely used because of their high cost -- over 1,000 euros.
The government has promised further financial assistance to those buying them. Purchasers will receive a copayment of around 300 euros from the government budget.
Public transportation is also covered by the VAT reduction. However, the Public Transport Enterprise Skopje (JSP Skopje) says the impact on fares may be small.
"The measure will only help lower the high costs of the outdated motor pool. We have not yet calculated if and how much we will lower the prices," JSP Skopje said.
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