“The first effect of this VAT cut will be the tax collection to the state budget, reducing the tax evasion by up to 60% to 15%-20%,” said Aurel Popescu and Sorin Minea, presidents of Rompan and Romalimenta employers’ associations, respectively.
The prices for basic food products will be down 15% once the measure is enforced, also said Popescu and Minea added.
Romania’s Government decided to cut the VAT for the basic food products from 24% to 9% as of 2013, as part of a package of measures for the agricultural sector, Premier Victor Ponta said Tuesday.
The VAT cut measure is equally enforced by other European Union countries such as Belgium and Germany, to ensure social protection and a higher VAT collection rate to the state budget.