Bread prices in Romania decline after VAT cut, tax evasion is lower

The price of bread in Romania has decreased by 10% from September 2013 to July 2014 and tax evasion by bread producers has dropped by some EUR 67 million, or 20%, after the value added tax VAT for bread was cut from 24% to 9%, said Daniel Constantin, Romania’s agriculture and rural development minister. “One year after the VAT for bread was cut from 24% to 9% we have a much healthier business environment as there were no more insolvencies and bankruptcies in the milling and bakery sector, and thanks to the taxed production we also have a more secure source of food for the population,” Constantin added, according to Agerpres. A research conducted by the authorities together with ROMPAN, the association of companies in the milling and bakery sector, shows that the bread production subject to taxation increased by 20%, from 862,000 tons to 1.026 million tons, between September 2013 to July 2014, compared to the previous similar period. This also helped consumers save some EUR 136 million in their flour and bread expenses. editor@romania-insider.com