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Romanian government raises VAT


Romania

Romanian government raises VAT

In life, you win some and you lose some, and consumers in Romania will soon discover the truth of that for themselves.

The government is to raise VAT by five percent, a day after the Constitional Court blocked its plans for a 15 percent cut in pensions.

The pension proposal was a key part of an austerity package needed to release fresh funds from the IMF and EU.

VAT will go up to 24 percent from July the first and should bring in around 900 million euros in extra revenue.

Flat-rate income tax will remain unchanged at 16 percent.

Hundreds of pensioners protested against the government’s austerity plan outside the constitutional court in Bucharest yesterday.

Tempers frayed and there were minor scuffles as many claimed cuts in wages and pensions would leave them struggling to make ends meet.

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