Non-food products in Romania get less than 1% cheaper after VAT cut

Most non-food products got cheaper by less than 1% after the VAT rate was reduced from 24% to 20% at the beginning of this year, according to a report of the Competition Council. Prices for products such as watches, audio-video equipment, sporting goods, cosmetics and sanitary articles, cars and car parts went down between 1% and 2%. “The initial effects of the VAT reduction can be best seen in the early months of the year,” the report reads. Changes in prices that have occurred long time after the VAT was reduced can’t be directly attributed to the VAT cut. They can be influenced by other factors that affect the economic environment. Some products can also present “certain adjusting rigidities in the price” that are specific to their field, according to the Competition Council. editor@romania-insider.com