Romania considers cutting VAT on bread this July

Newsroom 28/01/2013 | 15:09

As part of a tax pilot project, the Romanian government plans to reduce VAT for bread from 24 percent to 9 percent starting this July, said PM Victor Ponta, according to Mediafax newswire.

In order to implement this measure, the authorities need to find alternative ways to increase tax revenues by RON 200 million (approximately EUR 47 million), the sum estimated to be lost through the VAT cut, explained the PM.

Asked whether the measure was discussed with the IMF delegation Ponta said there were talks but the reduction will be further discussed during the next IMF visit to Romania.

“We will talk again at the end of May – early June and starting July, alongside with the budget rectification, we will try to implement this pilot project for a single product to see if our estimation, namely that a lower VAT leads to higher tax revenues and reduced tax evasion, is real,” said the PM.

Agriculture minister Daniel Constantin said last week that the 9 percent VAT for bread could be introduced as part of a pilot project starting with the second semester of 2013.

In order to boost tax revenues and fight tax evasion, the authorities have come up with a new fiscal scheme for individual farmers.

Simona Bazavan

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