Romania reconfirms 2016 VAT rate cut to 19%
- Jun 24, 2015 | Richard Asquith
The Romanian House of Deputies Budget Committee has reconfirmed plans to reduce the standard Romanian VAT rate from 24% to 19% in 2016. It is expected to be confirmed by the Parliament immediately. The cut is based on a quicker than expected return to growth in the country. There are discussion for a possible cut even sooner.
The European Commission has immediately criticised the proposal as undermining Romania’s fiscal position. The International Monetary Fund has also previously warned against it too. Romania has an emergency €4billion fund to tap into, but this expires in the autumn.
The proposal on Wednesday will push to return VAT to 19%. Romanian VAT was raised to 24% in 2010 at the height of the financial and Euro crisis. A final decision will take place by the end of this month.