Romania’s new government led by PSD’s Viorica Dancila will propose another VAT rate cut from 19% to 18% starting January 1, 2019, according to the new governing program, local Profit.ro reported.

After this measure will be implemented, Romania will have the second-lowest VAT rate in the EU after Luxembourg (17%).

The VAT cut to 18% should have been applied starting this year, according to PSD’s promises in the 2016 electoral campaign, but was postponed by the former government.

The new government also wants to expand the reduced 5% VAT rate currently applied for the sale of homes under 120 sqm to agriculture inputs, by January 1, 2019 at the latest. Another promise from the Dancila cabinet is reducing fiscal bureaucracy.

“Starting January 1, 2019, the number of taxes and fees applied in Romania will not be higher than 50,” according to the governing program.

Individuals will have to pay a maximum of ten taxes while the number of taxes for companies will be maximum 40. Unified fiscal data bases and the possibility to submit tax forms and pay any tax online are also among the measures targeted by the new government.

Some of these measures were announced by PSD in late 2016 but haven’t been implemented yet.

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editor@romania-insider.com