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Romania’s Fin Min To Take Corrective Actions If Lawmakers Adopt Lower VAT For Food

Romania’s Ministry of Economy and Finance is to present in parliament a series of corrective measures if deputies adopt a decision cutting by 5% the value added tax for basic food, finance minister Varujan Vosganian said Wednesday.
Romania’s Fin Min To Take Corrective Actions If Lawmakers Adopt Lower VAT For Food
06 feb. 2008, 18:31, English

He said that lower VAT for food is not a good idea at the moment, but will be benefic once the country’s inflation tension grows weaker and the inflation reaches 3% of the GDP.

He reaffirmed VAT reduction for certain products, such as basic food, will be possible after 2010, when the responsibility of tax reduction might be correlated with consumer protection measures.

Romania’s senate on Wednesday approved a 5% cut of the VAT for basic food – bread, meat, milk, vegetal oil and sugar.

The act is pending debates in the Chamber of Deputies, which is decisional chamber in the matter.

Premier Calin Popescu Tariceanu said that the finance ministry will appeal the act at the Constitutional Court, as, if adopted, the decision would trigger lower revenues to the budget and would leave food prices unchanged.

“Should the decision be promoted, the finance ministry will be mandated to attack the decision at the Constitutional Court,” Tariceanu said.