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June 13, 2021

Reverse charge on grain will lead to new hiking of bread prices

The Government adopted, on Tuesday, as we reported in an earlier edition, in maximum emergency conditions, pressed by the deadlines set in EU directives, an older bill for an ordinance to impose a new tax regime on the grain and industrial plants market. Thus, the value added tax (VAT) on grain and other agricultural produce transactions will be collected at the end of the commercial cycle, rather than throughout it. The VAT reverse charge system for grain and industrial plants is applicable as of yesterday and will be maintained until May 31, 2013. According to producers in the bakery and milling industry, in the first stage this could have a negative impact, first and foremost, on the consumers, namely, a slight rise in the prices of bakery products, after a similar hiking was spoken of, referring mainly to the price of bread, as a consequence of high taxes and cashflow problems, but, in the long run, the effects could be beneficent, HotNews reports.

The VAT reverse charge system, for grain and other agricultural products, will bring an extra RON 820 M to the state budget, by mid-2013, the Finance Minister, Gheorghe Ialomitianu, stated, during Tuesday’s Cabinet meeting.
In turn, the National Association of Romanian Exporters and Importers (ANEIR) stated, in a release remitted, yesterday, to the press, that the new reverse charge system for grain will put an end to the grain mob, “which caused annual damages of nearly EUR 500 M to the state budget and pushed law-abiding companies into bankruptcy”.

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