A reduction in the VAT should be visible in the shelf price, said Bogdan Belciu, Business and Management Consultancy partner with PwC Romania.

When the VAT increased, the shelf price reflected the surge, said Belciu, cited by local Capital.ro.

Lower prices would allow people to buy more, hence increasing consumption, and lead to a slight decrease in tax evasion, according to PwC.

The Fiscal Code draft law, which the Government approved this week, reduces the standard VAT rate from 24% to 20%.

However, the measures introduced by the new bill need to be sustainable and the Parliament needs to adopt the law in a similar form to the current one, said Daniel Anghel, Fiscal Consultancy partner with PwC Romania.

editor@romania-insider.com