Ministry of Economy Consults on Compensation Fund for Small Businesses Amid VAT Hike…

The Ministry of Economy and Environment is conducting intensive consultations with business representatives regarding a proposed insurance fund. This fund would compensate small businesses for first losses of up to $10 million, funded by raising the value-added tax rate from 20% to 21%. While the proposal is under discussion, small businesses are opposing the idea and are asking for an alternative funding model that does not involve a VAT rate hike.

The discussions are taking place with business associations and think tanks. The federation of employers has suggested that an alternative funding source could be an import levy on non-critical goods. The Ministry of Economy is currently evaluating these various proposals.