How will the VAT concession work?

But what is the compensation for the private operator?

The Ministry says that the financial formula foresees that the private company will start receiving compensation only if the internal VAT revenues will increase with more than 11% compared to one year ago. If these are not above this level, the state will pay the private company only 10% of the investment or 950.000 EUR a year.

The 11% level is based on the average internal VAT revenue increase in the past 17 years. According to the government, since the government hhas increased the revenues from the internal VAT with 11% each year, the private operator will have to make it more than this in order to start profiting.

The revenues from the internal VAT, which is collected by the Tax Office, are 30 billion ALL. This means that the private concessionary needs to increase them with more than 33.3 billion ALL in the next year, and so on for every other year. But how is the compensation calculated?

The formula is based on the level of higher revenues, with the 11% increase being to zero. If the revenue growth will vary from 11% to 15%, the private operator will receive 90% of it. If it is from 15% to 17%, the private operator will receive 6.5 ALL for every 10 ALL, and the state 3.5 ALL, and so on. The lower the increase, the lower the percentage that goes to the private operator.

This is one of the many fiscal concessions. It was proposed by a company based in Hong Kong, called EM Pos. The idea was seen as valid by the Ministry of Finances, which claims that the concession conditions have changed completely to increase the citizens’ profits.

The scheme foresees that the private operator will establish a special computer system and will administer its intelligence, while the revenues will be collected on terrain by the tax office inspectors.

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