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May 17, 2022

9 pc VAT for bread starting September, if approved by the IMF

At present, tax evasion is leniently presented at 67 pc but other statistics point to 80 pc, Ministry of Agriculture Daniel Constantin stated.
Authorities and the International Monetary Fund are currently negotiating cutting back bread VAT to 9 per cent. The final decision was to be made yesterday evening, Ministry of Agriculture Daniel Constantin stated for TV channel Antena 3. He emphasized that the VAT decrease to 9 per cent would be implemented starting September 1.
“It is a very important step, one for which we have signed on long ago. It is a matter of days until it is decided whether or not the measure will be implemented. Dropping the VAT to 9 per cent is part of a wider package of fiscal measures that are being negotiated with IMF. For now, I cannot confirm if it is 100% certain that the measure will be taken. At the moment, we do not have a solution based on cutting back the VAT. We have waited for this decision for many years, I think we could wait a day or two longer, until the IMF tells us whether it is an optimal decision, whether it can be included in the wider package or if it cannot be approved,” Constantin explained. He added that if the measure is approved by the IMF, a meeting will most likely be held midweek for producers and hypermarket representatives to discuss lowering the price of bread. Constantin also pointed out that this VAT cutback will be accompanied by additional governmental measures.
“This VAT drop from 24 per cent to 9 per cent will not be a fiscal measure. Other measures will be taken by the government. I will propose that a committee is established for overseeing the implementation of this measure and for preventing tax evasion; we must provide a much stricter control. My colleagues are negotiating a fiscal measure, which, nonetheless, has an extraordinary impact on agriculture and the final price of these products. If this measure is successful, the VAT cutback will be extended to other products in 2014, starting January 1 or June 1. We’ll see”, the leader of the Ministry of Agriculture and Regional Development stated. In turn, Prime Minister Victor Ponta has announced, on Sunday, he plans to meet with associations of bakery industry producers, with whom to agree that the Government would reduce VAT on bread, only if they pledge to support the authorities in combating tax evasion.
The Ministry of Agriculture also listed other positive aspects of the cutback both in the financial sector – increased budget proceeds, preventing tax evasion, and lowering the price of bread) and in the social sector, considering there are many honest companies today who pay their taxes, their VAT and who have become insolvent because they cannot overcome competitive inequality. “These companies will become bankrupt. Many jobs are uncertain at the moment…”, Daniel Constantin added, according to money.ro
The Ministry of Agriculture also pointed out that at the moment, tax evasion is leniently presented at 67 per cent, while other statistics point to a value of 80 per cent. “The average consumption of bread in the EU is 80 kilograms per capita per annum. In Romania, older statistics showed that Romania came in second after Bulgaria, with an average consumption of 100 kilograms per capita. Today Romania’s average consumption is below 30 kilograms per capita. Evasion is responsible for the difference”, Daniel Constantin explained.

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