Romania's Government unveiled plans to cut VAT from 24 to nine per cent for all food products and non-alcoholic beverages. The measure will come into force from 1 June.
The Romanian government took this decision because of the high impact of food prices on family budget, according to news site Balkan Insight.
Romanians spend almost a third of their income on food, compared to an EU average of about 18 per cent. The government estimates that the VAT cut should lead to a drop of about 12 per cent in food prices, the site reported.
The VAT cut may trigger shopping tourism from the neighbouring Hungary, said György Vámos, chief secretary of the Hungarian national trade association OKSZ. He told the local Magyar Nemzet daily that many Hungarian families living near the border are likely to do their food shopping in Romania in the future.
Once the VAT in Romania is reduced to one-third of the 27 per cent levied on most products in Hungary, more Hungarian families will be inclined to shop on the other side of the border, this way contributing to the Romanian budget rather than the Hungarian, György Vámos was quoted as saying by the daily.
© 2015 European Supermarket Magazine – your source for the latest retail news. Article written by László Juhász.
