Starting today (1 June), Romania has reduced VAT on food from 24 per cent to 9 per cent. According to the Association of Big Commercial Networks in Romania, the cut will lead to significant reductions in supermarket prices.
Almost 84 per cent of Romanian consumers have welcomed the VAT reduction, according to a recent INSCOP survey.
The Romanian government estimates that the VAT reduction will have an impact of EUR 4.1 billion on the budget by 2018.
In addition, the profits of large retailers could advance this year by 15-20 per cent, following the move. However, according to the KeysFin agency, quoted by Agerpres, the decrease in food prices will only be short-term and circumstantial.
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.
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