Tax evasion may reduce by 30-40 pct after cutting VAT on foodstuffs (Sindalimenta)

Tax evasion in the food industry may decrease by 30-40% after cutting VAT on foodstuffs to 9%, but it may reach almost 70% if the tax authority ANAF continues checks and increases fines, President of the National Federation of Food Industry Trade Unions "Sindalimenta" Dragos Frumosu told AGERPRES on Wednesday.

"Sindalimenta" president Dragos Frumosu
Photo credit: (c) Sorin LUPSA / AGERPRES PHOTO

"Reducing VAT on foodstuffs is a very good method, generally speaking, for all the people and it would be a shame to compromise it. I believe that tax evasion in the food industry could be reduced by 30-40% after slashing VAT rate. If the ANAF increases the number of verifications, and if they levy harsher fines, I think we can achieve a reduction in tax evasion by 60-70%, which is quite a lot," said Frumosu.

According to the cited source, by reducing tax evasion in food industry, more money can be collected to the state budget and this money can be directed to healthcare and education.

In Frumosu's opinion, the first benefit of reducing VAT on foodstuffs is related to food becoming cheaper, which is an important one for population, taking into account that a Romanian's food costs represents between 40 and 60% from their monthly income.

Prime Minister Victor Ponta announced on Tuesday slashing to 9% the VAT on all foodstuffs, soft drinks and food public services, as of June 1, 2015. AGERPRES