Romanian PM: Returning to a VAT of 19%, sustainable only with a GDP growth rate of over 3%

A possible drop in the VAT in Romania from the current 24 percent back to 19 percent is sustainable if the country will continue to register the same economic growth as last year, of over three percent, according to Romanian Prime Minister Victor Ponta. His statement came soon after the new Government platform was released, including a planned VAT cut. “If we have a growth rate similar to 2013, of 3.5 percent, it is sustainable,” said Ponta at local TV station, quoted by Mediafax. The VAT rate increased in 2010 from 19 percent to 24 percent. The Prime Minister added that a reduced VAT for fruits and vegetables was also taken into account. Last year, the Romanian Government decided to cut the VAT for bread from 24 percent to 9 percent. “From my point of view, we should go, as much as possible, towards targeted areas […] I’d want this measure to be applied for fruits and vegetables, because there we also have huge tax evasion and unfair competition between local producers and the fruits and vegetables brought from outside the European Union,” said Ponta. He added that a lower VAT for both meat products and fruits and vegetables might also be an alternative, if possible. Returning to a VAT rate of 19 percent and extending the VAT reduction to other food products from 24 percent to 9 percent are included in the new Government program. Irina Popescu, irina.popescu@romania-insider.com (photo source: Sxc.hu)