"No Agreement Between Romania and European Comission" on the Fiscal Code

The European Commission and Romanian authorities have failed to reach an agreement on the Fiscal Code, but it would make a decision at the upcoming meeting of the EU’s Finance Ministers of July 14, regarding the status of the financial agreement with Romania, reports RRI. 

Additionally, the IMF will cancel its assessment mission to Romania for next month, given that the Commission will already have presented its conclusions, Finance Minister Eugen Teodorovici announced on Thursday on public radio RRA.

According to the Romanian official, the European Commission is concerned regarding the impact of the new fiscal code on the budget as of next year. The new Fiscal and Fiscal Procedure Codes are to come into effect on January 1, 2016.

Among the main provisions is the VAT cut from 24 to 19%, slashing the tax on special constructions as well as the excise duty on fuel.

Additionally the authorities want to eliminate the 16% tax on dividends.

Minister Teodorovici said that Romania stands by its financial commitments, especially regarding structural reforms.

The VAT Rate Cut From 24% to 19%, "Starting January 1, 2016"

The Budget Commission within Romania’s Chamber of Deputies unanimously approved on June 22 the new Fiscal Code, which includes the VAT rate cut from 24% to 19% starting January 1, 2016.

Finance Minister Eugen Teodorovici said that analyses show that such a measure will have good effects in the economy, reports local romania-insider.com.

Already the opposition said it is favorable to the new VAT rate, "unless the budget income do not allow".

Prime Minister Victor Ponta announced on June 21 on his Facebook page that the Government will support the general VAT rate cut from 24% to 19%, and not to 20% like previously announced. He said the cut should be applied before January 1, 2016.

Health Minister Nicolae Banicioiu and Finance Minister Eugen Teodorovici visited Mr. Ponta in Turkey, where the Prime Minister went for a knee operation.

They discussed the VAT cut and the drug price reduction, Victor Ponta said.

The VAT On Food Products Will Be Cut On Monday

Foto: Supermarket in Bucharest.

The value-added tax (VAT) will be cut from 24 per cent to nine per cent for food products (e.g. milk, eggs, vegetables, meat, fish, tea, coffee or spices), live animals, plants and seeds, non-alcoholic beverages and food ingredients - according to the news agency Mediafax.

The new tax will come into force on Monday, 1st of June. A nine percent VAT is already in place since September 2013 for bread and bakery products.

Mediafax is quoted as saying that a 12.4 lei piece of cheese of 250 grams will cost 10.9 lei after the new tax will apply.

"The prices will drop with 12 per cent", a representative of a food chain in Romania is quoted. 

The new VAT will be applied in restaurants, too.

The products purchased with the new tax will be shown distinctly on the tax receipt, according to the Finance Minister Eugen Teodorovici.

He said that the new VAT for food products will generate an 0.6 per cent increase of GDP.