New economic measures
Following a VAT cut in bakery products, the government is considering a similar reduction for other products as well, given that the former measure was a fiscal success. Last year, the government cut the 24% VAT for bread, flour and wheat to 9% in an efforts to combat tax evasion. The negative impact of this measure on budget returns was compensated for by an increase in excise duties for alcohol and luxury products.
Mihai Pelin, 05.09.2014, 12:42
Following a VAT cut in bakery products, the government is considering a similar reduction for other products as well, given that the former measure was a fiscal success. Last year, the government cut the 24% VAT for bread, flour and wheat to 9% in an efforts to combat tax evasion. The negative impact of this measure on budget returns was compensated for by an increase in excise duties for alcohol and luxury products.
Apart from a VAT decrease in the cost of food products, prime minister Victor Ponta believes Romania has to find new retail markets and sources of investment. Back from a visit to Beijing, where he met representatives of Chinese companies interesting in investing in Romania, the prime minister said his country could complement its budget returns and EU funding with Chinese investments in energy and infrastructure projects worth 6 billion euros. Victor Ponta:
“It’s important to attract more investment, create new jobs and ensure our energy independence, all the more so as Romania is in favour of and believes it is necessary to impose new economic sanctions on the Russian Federation. This means that Romanian producers and the Romanian economy in general have to look for new markets and new investments.”
The government has also announced that the tax on special building structures will drop from 1.5 to 1%, while the resulting revenues will no longer go to the state budget, but remain with the local authorities. Victor Ponta explains:
“This will give local authorities greater opportunities for development — I’m referring to schools, hospitals and roads.”
The tax on special building structures only applies to legal entities and is levied on structures such as poles, ramps and concrete platforms.
