Gov’t is contemplating lowering VAT to 9 pc for foodstuffs

This measure will lead to a 15 per cent drop in prices and to a significant drop in tax evasion, the representatives of food industry employers’ associations stated. The document also include a crediting fund, extra funds, lowering of irrigation tariff and compensating farmers.

The government will lower the tariff for water used for irrigation by RON 50/one thousand cubic meters, will earmark an extra EUR 25 M for irrigation projects and will compensate farmers affected by drought, Premier Victor Ponta announced yesterday during a press conference. He pointed out that lowering the tariff for irrigations will result in the irrigated surface growing by at least 35,000 hectares.The compensations will be paid, after the harvest period, to SMEs whose production was affected by at least 30 per cent, their revenues set to be compensated with 80 per cent of the losses registered this year because of the drought, as well as to farmers that do not fall within the SME category, the latter set to benefit from an individual aid of EUR 7,500. “I agreed to ask the European Commission for a down payment of up to 50 per cent of the value of direct payments for agriculture in 2012, starting on October 16,” Ponta added.The Premier also pointed out that he supports a VAT of 9 per cent for foodstuffs starting January 1, 2013. “I support the idea of a differentiated VAT of 24 per cent, 9 per cent of which would be collected for state budget and 15 per cent of which would be reimbursed to the producer provided he presents invoices and all operations are fiscally registered,” Ponta stated. According to the Premier, the government estimates that the effects of introducing the 9 per cent VAT will be a drop in prices and in tax evasion. “The first effect would be a hike in budget revenues. Tax evasion in the case of bread will drop from today’s 60 per cent to 15-20 per cent,” Aurel Popescu, president of Rompan, stated. He added that that the price of staple food products, including bread, will drop by 15 per cent.Likewise, the government decided to ask the EC to re-allocate EUR 200 M for rural infrastructure programmes and to cancel non-bankable projects running into the hundreds of millions of Euros in 2008-2010, projects for which the beneficiaries did not make any payments in recent years, the funds set to be earmarked for new agricultural projects instead, Mediafax informs. At the same time, in the following period a crediting fund from rural development allocations will be set up in partnership with the banks, so that accelerating the absorption of EU funds and avoiding the disengagement of over EUR 1 bln at the end of the rural development programme financed by the EU will be possible.

Constantin: southern, southeastern and eastern counties affected by drought

Drought has affected crops in southern, southeastern and eastern counties. The Agriculture Ministry will establish the sums with which farmers will be compensated, Agriculture Minister Daniel Constantin stated yesterday during the same conference. “Transylvanian counties were somewhat safe from these problems. If you look at the desertification map you will see we have most of the problems in the southern region. I cannot issue an estimate at this point because we are in the midst of the harvest. 80 per cent of the wheat production has been harvested,” he said. The minister stated that conclusions will be reached after the harvest and a government decision on offering compensations will come into force.Constantin also stated that the government will ensure all the necessary sums in order for the farmers to receive “that compensation of 80 per cent” of the damages.


BRD to offer credits to farmers that benefit from subsidies this year too

BRD has signed for the second consecutive year a tripartite convention with the Agency of Payments and Intervention for Agriculture (APIA) and the Rural Credit Guarantee Fund, a convention that allows it to offer to the beneficiaries of surface-based subsidies loans that will cover 90 per cent of the subsidies, Mediafax informs. The new agreement hikes the down payment obtained by clients from 80 per cent to 90 per cent of the value of the sums they have to receive, the latter certified through an APIA certificate. “Apart from the hiked down payment, another advantage for BRD clients is the simplified paperwork, the credit being offered after the APIA certificate is presented,” the bank communiqué adds.


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