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Romania Lower House Committee OKs Bill Scraping Lump-Sum Tax, Setting 5% VAT On Food, Constructions

Romania’s Chamber of Deputies budget-finance committee Wednesday endorsed a bill submitted by the opposition, which scraps the lump-sum tax and sets the value added tax on food and home construction at 5%.
Romania Lower House Committee OKs Bill Scraping Lump-Sum Tax, Setting 5% VAT On Food, Constructions
30 iun. 2010, 17:03, English

The bill, which aims to amend the Tax Code, was initiated by the lawmakers of the opposition Social Democratic Party, Conservative Party and Liberal Party.

Committee members accepted an amendment to the Tax Code which eliminates the lump-sum tax the Government planned to introduce and another than cuts the value added tax (VAT) to 5% for food, cereal and contraction of new homes, committee vice-president Daniel Chitoiu told MEDIAFAX.

A final decision on changes to the Tax Code will be made by the plenary of the Chamber of Deputies.

Romania’s Government decided this weekend to raise the VAT to 24% as of July 1 from the current rate of 19%, to compensate for pension cuts the Constitutional Court ruled illegal.

Romanian authorities have vowed to take drastic measures to keep this year’s budget deficit below 6.8% of gross domestic product, as agreed with the International Monetary Fund, which is leading a EUR20 billion rescue loan for the recession-hit country.