Food industry employers plead for lower VAT on food instead of overall cut

The food industry employers' federation Romalimenta supports a cut of the VAT on food; it asserts the impact would be greater than that of a general VAT decrease from 24 to 20 percent.

Photo credit: (c) Alex TUDOR / AGERPRES ARCHIVE

A lower VAT on food would limit the tax avoidance, which would have a strong impact both on the population and on the economy, Romalimenta stated in a release to AGERPRES on Tuesday.

According to the food industry representatives, cutting the VAT selectively would increase the consumption and raise the living standard and the general health levels; also, it would boost the domestic production and bring legitimate production prices below the black economy ones.

Romalimenta argues that the state's tax income would be higher, not lower after such a cut.

The new Tax Code proposed by the Government includes a general cut of the VAT from the current 24 percent to 20 percent on January 1, 2016 and further to 18 percent on January 1, 2018. The VAT on basic foodstuff is set to be diminished to 9 percent in 2016.

Prime Minister Victor Ponta insisted the budget can afford such tax alleviations; on Monday, however, he announced that the Executive would choose in a couple of days between an overall cut of the VAT or a reduced rate of this tax just for food. AGERPRES