Tourism Minister Gari Cappelli on Wednesday said that it was time for tax changes in tourism and recommended a VAT rate of 13% on food and beverage services to be part of the fourth round of the tax reform.

“I’ve been asking for that from day one,” Cappelli told reporters ahead of a government meeting.

He informed that he is calling for a VAT rate of 13% on all food and beverage services and added that it was time for that to occur in the fourth round of the tax reform.

Asked whether that would lead to lower prices, Cappelli said that VAT is not the only problem and that the entire tax reform needs to be observed. He said it was time for “tourism to feel an additional step in the fourth round” of the reform and that it was necessary to improve quality and increase wages to make tourism more competitive.

He recalled the recent reduction of VAT on food and accommodation for personnel who work outside their usual place of residence.

“I think that it is time for an extra step, either through personal income or VAT, which would create the opportunity to increase wages and for tourism to start breathing in that segment,” he said.

Asked to comment on some cases of “rudely high prices,” Cappelli said that the state would not intervene in that but that these cases were not good.

“I’m reading about what is going on. Gone are the times when you could make easy money in a month or two. Tourism has become real business,” he said.

Asked whether it was time to discourage apartment-style accommodation, he said 70% of apartments had 3 stars and that he would insist on a reclassification and for quality to be improved.

“They won’t be ruined but they will get the message: improve your quality or you will have to shut down,” he said.

The Croatian Tourism Association said it welcomed the possible reduction of VAT on tourism products, adding that it would enable the necessary investment in better quality as well as higher salaries.