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IMF Official: VAT Increase Up To Romanian Govt

A possible increase of the value added tax in Romania may only be decided by the government, but tax hikes should be unnecessary if the economy recovers sooner than expected, a top official with the International Monetary Fund said Wednesday.
IMF Official: VAT Increase Up To Romanian Govt
12 aug. 2009, 16:32, English

Jeffrey Franks, chief of the IMF mission to Romania, said the authorities in Bucharest did not announce any plans to hike the VAT, and that such a decision should be carefully considered ahead.

On Monday, Franks said Romania’s economy is likely to touch a record low over the next three quarters, after which it should recover. The IMF official estimated a slight economic increase of 0.5%-1% in Romania next year.

The IMF, from which Romania secured a EUR12.95 billion two-year standby loan back in spring, has sent a mission to Bucharest for a first review on the country’s economic progress.

Romania, whose economy shrank at a faster pace than anticipated in the first quarter, obtained some leniency on its budget deficit this year, after the Fund accepted a higher cap of 7.3% on the GDP.

The initial deficit cap agreed upon was of 4.6%.