Romania’s draft Tax Code stipulates VAT rate cuts to 9% for meat, fish, fruit and vegetables. Romania already reduced VAT on bread and bread products to 9%.
The association said the measure discriminates their industry and could reflect negatively on vulnerable consumers, such as children, teenagers and seniors.
Excluding the dairy industry from VAT rate cuts will perpetuate uneven competition between EU and Romanian products on the local market, competition that is even fiercer now, following Russian embargoes, the association said.
According to the association, the domestic dairy market is estimated at nearly EUR900 million. The biggest producers on the local market are Danone, Albalact, Friesland, Olympus, Delaco and Hochland.
In response, Finance Minister Darius Valcov said the only reason milk and dairy products were left out was because farmers and manufacturers had not reached an agreement. While manufacturers call for lower VAT, dairy farmers said they did not agree to this measure. The minister added the government will consider lowering the sales tax on milk and dairy once farmers and producers reach consensus.