Romania cuts foodstuff VAT to 9% June 2015
- 08 April 2015 | Richard Asquith
The Romanian government has announced plans to recategorise basic foodstuffs from the standard Romanian VAT rate of 24% to the reduced VAT rate of 9%. This reduction will come into place on 1 June 2015.
There had been indications that the Romanian VAT rate would be cut from 24% to 20% this year. This plan is likely to happen in 2016. A number of Romania’s major creditors, including the International Monetary Fund, had recommended that the country’s finances were not yet robust enough for this. The government has also stated that it hoped to eventually cut VAT to 18% by 2017. Romania had increased VAT from 19% to 24% in 2010.
A reduction in foodstuff VAT will cost an estimated RON 5 billion per annum. But it should assist the domestic fruit and meat sectors which have been badly hit by recent Russian sanctions. This has led to a big influx of imports from countries such as Greece looking for new markets.
Romania had already reduced bread to 9%, and this shift for all basics will bring the country into line with most other EU member states.