ROMPAN: Tax evasion in the bread industry down 20 pct

Newsroom 05/09/2014 | 12:57

Cutting back the VAT from 24 to 9 percent increased taxed production to 225,000 tonnes in the last ten months in the bread industry, according to Aurel Popescu, president of ROMPAN. Moreover, tax evasion on this segment dropped 20 percent, writes economica.net.

“We will issue an annual report on October 15, but after 10 months since cutting VAT we managed to tax 225,000 more tonnes of bread and pastry products and 20 percent of the grey economy has been brought to the surface. Prices dropped on average 12 percent and producers sold safer products. Of course it is not enough, those who used to bring damages via VAT have found other methods” Aurel Popescu argued.

The ROMPAN head added that the bread industry has recovered in 2014, after two years ago experiencing a wave of bankruptcies and insolvencies. Tax evasion has been reduced from 70 percent to 40-45 percent.

“We can now enjoy a more secure and stable market. We haven’t had to deal so much with insolvencies of companies in the field and tax evasion has dropped to 40-45 percent. I am hoping we can implement a new measure this year of only selling bread in specialised aisles”, Popescu added.

According to Rompan data, Romania’s total bread production stands at 1.8 million tonnes/year and average individual consumption is 78 kg/year, over the European average but down in comparison to the level registered in 1989 (136 kg/year).

Prime Minister Victor Ponta asked Agriculture Minister Daniel Constantin on Thursday to find the “next target” for Value Added Tax (VAT) reduction, considering that this measure applied to bakery products was correct in terms of fiscal budget, reports local Mediafax.

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