According to Botanoiu, reverse taxation must be followed by additional measures such as VAT refunds within 45 days, as well as by measures supporting farmers like subsidized interest on loans.
Botanoiu highlighted that 20% of the local cereal and industrial-use plant market escapes taxation.
Victor Beznea, president of the Romanian Association of Agricultural Product Traders, estimated the tax will bring the state budget over EUR500 million in an agricultural year.
The Romanian Government approved Tuesday a draft emergency ordinance whereby the country will apply reverse taxation on cereal and plants with industrial use for about two years staring June 1, 2011, after it received approval from the European Union.
Prime Minister Emil Boc said the measure represents one of the most efficient ways to counter tax evasion.
According to the finance minister, budget revenues from the tax will amount to 240 million lei (about EUR58 million) in 2011 and RON410 million in 2012.
Last year, Romania requested derogation from EU regulations to apply reverse taxation on intra-community trade with cereals, fruit, vegetables, meat, sugar and bread. The European Commission rejected the request.
In December 2010, the country told the EC it revised the list of products for which it wants to apply reverse taxation. Romania’s new request concerned only cereal and plants for industrial use (corn, wheat, barley, rye, two-row barley, soy, rapeseed, sunflower and sugar beet).
In January 2011, the European Commission’s Directorate-General for Taxation and the Customs Union endorsed Romania’s new request, which was approved by the Council of the European Union in May. (EUR1=RON4.1298)