The VAT cut from 24% to 9% on food starting June 1 will generate an additional economic growth of 0.6% this year, said Prime Minister Victor Ponta. It will bring an extra EUR 1 billion to the GPD, reports local Economica.net.

The VAT cut will also contribute to the fight against fiscal evasion and will not generate deflation. The measure will also generate an increase in consumption, said Finance Minister Eugen Teodorovici.

“I don’t believe that all Romanians are tax dodgers,” said Ponta. “At a 24% VAT, it’s worth dodging taxes, but at 9%, not really.”

editor@romania-insider.com