At the same time, meat prices are estimated to fall by minimum 20% and the consumption increase will bring additional revenue to the state budget of at least EUR160 million.
Romania’s meat consumption fell by approximately 30% in the past years due to the lower purchasing power after VAT on meat rose from 19% to 24%.
Agriculture Minister Daniel Constantin stated Thursday that the VAT decrease on meat, fruits and vegetables will reduce tax evasion and the effects of the Russian embargo, while the prices of meat, fruits and vegetables are expected to go down.
Romania’s government plans to lower the value added tax from 24% to 20% as of next year and to 9% on food items such as meat, fish, fruits and vegetables, according to the country’s new Tax Code draft. The government plans to lower the VAT even further, to 18%, as of January 2018.
For 2016, revenues to the state budget are estimated to drop by RON11.6 billion but revenues from VAT, social security contributions and income tax are estimated to grow by RON6.4 billion, resulting a net impact on the state budget of RON5.2 billion.