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Trade Dept: Discuss the implications of zero VAT for business

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Problems of burdened liquidity arise in companies according to the President of the Commission, Kyriakos Hatzigiannis

Επ. Εμπορiου: Συζorτησε τι ς επιπτoσεις μηδενικοy ΦΠΑ για &epsilon ;πιχειρorσεις

The effects on the food production sector in terms of the liquidity of businesses after the imposition of a zero VAT rate on food and possible ways of dealing with them were discussed, among other things, on Tuesday by the Parliamentary Committee on Energy, Trade and Industry.

After the session, the President of the Committee, DISY Member of Parliament, Kyriakos Hatzigiannis, stated that the zero rate led some food production companies, mainly in the primary sector, to have a problem of burdened liquidity because the share they were collecting is not being collected now and as therefore, solutions should be found to help these businesses or units without burdening their liquidity.

He pointed out that the specific issue is not to be underestimated and noted that the Ministry of Finance has committed to speed up the VAT refund to all these businesses, which are affected and possibly to study two other proposals either to impose or transfer the zero rate of VAT to animal feed or even and with the standard applied in the construction sector to investigate whether it can also be applied in the food sector or in the specific case of those businesses affected by the zero rate in food.

Mr. Hatzigiannis stated on the same subject that there is no documentation that the zero VAT rate on food has led to such an effect that this benefit is passed on entirely to the consumer and sounded the alarm.

“We want evidence that from the moment the state has lost or reduced the imposition of VAT to 5%, by extension, no one will benefit from it in the interim period and the consumer will simply pays the same, as has been said within the Commission, under the pretense that it was in a sales period and they continued to sell even more expensively, after the deduction of the zero rate,” he said.

Mr. Hatzigiannis also said that there was also a discussion of the controversial issue of abolishing the 350 euro fee from all registered companies and he stated that there is progress on this specific issue. He added that the Commission as a whole has indicated that it has wondered whether this fee should be phased out over 2-3 years. He noted that the details have not yet been determined.

He pointed out that this is a positive development and despite the government's refusal “nevertheless we as a Commission will shape the text in this way possibly also in the form of an amendment so that the Plenary can have this option before it”.

Finally, Mr. Hatzigiannis mentioned that the Committee was informed that the European Commission is preparing a Regulation based on which all products which are products created as a product of the slave trade cannot be freely circulated within the European Union.

Source: www.kathimerini.com.cy

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