Hiking VAT, The Easiest Way To Increase Budget Revenue In Romania – PwC

He said a potential VAT increase would not exceed two or three percentage points and the move won’t affect Romania’s ranking in the world top regarding the easiness of paying taxes.

On the other hand, the introduction of the minimum tax was not a good measure, as it added to the administrative burden for companies, PwC official said.

While its introduction may have been well intended, the minimum tax did not have a positive impact on the business environment or on the tax collecting system, de Ruiter added.

He said Romania should simplify administrative requirements, clarify its laws and employ better-qualified staff at the Finance Ministry and the tax administration ANAF in order to improve tax collecting procedures.

The Romanian authorities would make a „big mistake” to increase the value added tax and the flat tax, as changing them after the effort it took to keep them at the current levels would be procyclic policy, an official of the Finance Ministry said last week.

Romania currently levies a flat tax rate of 16% a year and a value added tax at 19%.