Excise and VAT; review of Chapter III

Excise and VAT are indirect taxes: they are added to the price of a good or service and in the end paid by the buyer, while the producer, seller or importer hands them to the state. Excise is placed only on certain goods — alcohol, tobacco, fuel such as petrol and gas, and certain other goods listed in the law; the aim is to fill the budget and limit consumption that harms health or the environment. The excise rate is set as a percentage of value or as a fixed sum per unit of the good. VAT is paid on almost all goods and services, and its object is the turnover from selling (realisation) or importing goods. The current standard VAT rate is 12% (since 2023); the 20% in the book is outdated: the rate was cut to 15% in 2019 and to 12% in 2023. VAT is taken not from the full price but only from the added value created by that firm: VAT = (price − intermediate consumption) · rate, where intermediate consumption is the value of other goods and services used up in production.