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January 26, 2022

PM Tudose on split VAT: Optional for starters, mandatory after Jan.1 2018

Prime Minister Mihai Tudose has announced that the split Value-Added Tax (VAT) will be optional for a time, but from January 1, 2018 it will become mandatory.

“It will be optional in the first stage, as far as I understand from the finance minister. You can do this or not, but from January 1, it will be mandatory because everybody wants everything from the government, but when the government erects some fences things only get easier (…) Firefighter costs, ambulances cost, hospitals cost. All this is unsustainable if supported by the income tax only. (…) Let’s stay within normalcy limits. There is no alternative, because I do not know when someone may take the money and run. I cannot guard 100,000 business operators,” Tudose told Romania TV private broadcaster on Wednesday.

He explained that companies that do not currently pay VAT can no longer continue the same practice, but “75 percent of the payers are all right.”

“Because when you get the VAT, it does not go into your pocket, it goes into the government’s tap,” said Tudose.

He explained that VAT has two components and that, at present, some companies are going bankrupt after not paying VAT for a time.

“When you go buy a package of biscuits, you see the shelf price at the counter with two components: the price for the biscuits and the VAT, which is what Romanians pay the government (…), it is what used to be a tax on the movement of goods. Today, we are talking about Romania – 25 percent of the money that the citizens have to pay for the goods and that has to come to the government, is leaving or going away, disappearing. How? By various methods: some do not pay at all and pray not to get caught, others, with more or less imagination, after collecting some money that they do not pay to the government, declare their companies bankrupt,” added Tudose.


“Creating new well-paid jobs is among government’s main goals”


Creating new well-paid jobs is one of the main goals of the Government, Prime Minister Mihai Tudose wrote on his Facebook page on Wednesday.

The Prime Minister says the adoption by the Executive of the bill on teleworking is a “good piece of news for those who want to work from home, but also for employers.”

“For some time now, and in most European countries, teleworking, adopted today in the Government meeting, is an important measure in the governance programmme that benefits both employees and employers (eg savings in terms of utilities). Teleworking comes in addition to other measures that support job seekers, and I am referring to the ‘First Rent’ programme, the minimum wage reimbursement for apprentices and interns, endorsement of the SME sector,” Tudose wrote. “The creation of new well-paid jobs is one of the main objectives of the Government that I lead!,” concluded the Prime Minister.


“I’m not afraid to replace ministers”


Prime Minister Mihai Tudose said on Wednesday he has no “fear” to change a minister if he or she fails.

“I have asked for, and it works, a weekly meeting at the ruling coalition when the Government comes and says what it has done, what it is going to do, why it did it, why it did not do it. We are a political government, the chairs and colleagues have taken responsibility. Our colleagues have not voted us in to find out on TV what it is going to happen; that is not really a very good thing, as I would, for example, be upset to learn from other sources about what a minister does. (…) An assessment board has been set in place (…), we see the whys of the delays and if we can remedy it, if not, the guilty ones go home, ” Tudose told Romania TV private broadcaster in an interview that aired on Wednesday.

Asked if he has “fears” or “constraints” when replacing some failing minister, the prime minister replied: “I do not really have any fear.”

Tudose called “gossip” a possible Cabinet reshuffle in September.

“Had we heeded to the gossip so far, we would have changed the Cabinet four times,” he said.

Tudose also said that he is not tempted to take over the national chairmanship of the Social Democratic Party (PSD), major at rule.

He also said he has a normal relationship with President Klaus Iohannis.

“I find it normal for me to have discussions [with President Klaus Iohannis] when there is about some external component or the armed forces. I think it is normal for him to find out from me what is going on in the country. I do not want some extraordinary government with some extraordinary ministers, but normal ones,” Tudose said.

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