March 10 (SeeNews) - North Macedonia's government said it will remove VAT on basic food products, as well as reduce VAT and lower excise duties on fuels within a set of measures worth 400 million euro ($441.9 million) adopted to safeguard the living standards of its citizens and ensure liquidity of local companies amid the global energy and food crisis.
There is enough food and fuel reserves to meet the country's needs but the prices of these goods are very high on the global markets and the measures are expected to mitigate these price increases, prime minister Dimitar Kovacevski said in a statement on Wednesday.
Under the package, the government will remove VAT and freeze margins on sales of bread, sugar, flour, edible sunflower oil, milk, meat, rice and eggs. Currently, VAT on these food products is 5%.
The government will also remove customs duties on all imports of basic food products and scrap VAT on imported natural gas, electricity, thermal and cooling energy. VAT on fuels will be lowered to 10% from 18%.
The government also decided to provide subsidies on electricity and gas bills for households and proposes changing the pricing methodology so as to lower the electricity prices for the most vulnerable citizens.
Furthermore, pensioners and about 35,000 of the most vulnerable citizens will receive vouchers of 1,000 denars ($17.9/16.2 euro) per month for a period of three months to purchase basic food products.
The government will also provide subsidies on loan interest rates, as well as give interest-free loans through the Development Bank of North Macedonia to companies to support their liquidity. Companies can also benefit from loans to invest in energy efficiency project and renewable energy production.
($ = 0.9051 euro)