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Bucharest
February 27, 2021
BUSINESS

9 pc VAT on bread, as of July 1st

Premier Victor Ponta announced that the government will enforce an experimental VAT reduction for bread. During July 1st – December 31, the VAT charged for bread will be 9 pc. The measure was agreed with the International Monetary Fund and, if the results are positive, the value-added tax might be also diminished for other basic food goods, like fruits, vegetables or meat, the prime minister added. “We thought about enforcing this reduction along the whole chain, because we are not allowed to operate it only partially, and see if, during the six-month interval, our theory that, in fact, we will have higher VAT incomes with a lower VAT, or the IMF’s theory about having a new hole in the budget, is real. This is why I asked (Agriculture minister) Daniel Constantin to make a partnership with producers, explain them that, if we are successful, we will expand it from bread to other products,” Victor Ponta explained in the TV show ‘Income Magazine,’ on Antena 3.“This is a bold and exceptional measure.

This measure will revolutionise the issue of tax evasion,” the president of ROMPAN, Aurel Popescu stated.During the same show, the premier mentioned that authorities can address a VAT refund demand to Mechel group and will toughen the sanctions against the private investors that do not comply with some obligations, such as paying compensatory salaries, but without becoming “over-protectionist” and discouraging investors.

Victor Ponta also announced that a big German auto company will open a factory in Romania, with the company board being expected to make a final decision with this regard. However he did not mention the name of the company or its field of activity.

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