Romania to abandon preferential VAT rates, except for food and medicines

Romania will maintain its standard VAT rate at 19% but will eliminate most preferential VAT rates beginning in August, retaining reduced rates only for food and medicines, Digi24 reported on June 20, citing sources close to the negotiations between president Nicușor Dan and prime minister-designate Ilie Bolojan. The final decision on lifting the standard VAT rate depends on the October 15 evaluation of the fiscal consolidation plan.

The decision is part of a fiscal policy compromise intended to increase state revenues while allowing president Dan to honour his campaign commitment not to raise the general VAT rate. According to the agreement, the current 5% and 9% VAT rates applied to various goods and services, including cultural events, books, firewood, and museum tickets, will be increased; however, the exact new rates have not yet been specified.