Romania reduced rates of VAT and other taxes

It is worth to notice that Romania – despite the opposition of the International Monetary Fund and the European Commission – decided to take a chance and significantly reduced the rate of VAT and other taxes for small businesses. The effects have to wait long. The Romanian government reported a significant increase in budget revenues, which in turn contributed to the creation at the beginning of the budget surplus. Why not to conduct such an experiment in the other countries?

Let’s recall

Romanian authorities have decided that from January 1 in the country apply lower VAT rates. The basic rate was reduced from 24 percent to 20 percent. Previously it reduced the rate of food – from 24 to 9 percent. As if that was not enough the government in Bucharest decided that since the beginning of the year, a tax rate for a self-employed sole traders it was only 3 percent. If such an undertaking employ a worker, the rate PIT drops him to 2 percent. If you hire two employees – PIT rate is reduced to only 1 percent.!

Effect? – Until mid-March tax revenues in Romania grew by 7 percent. compared to the same period last year. Of course, this is only the beginning of the year, but taking into account the good GDP growth forecast (Romania has recorded growth this year at 4.1 per cent. Of GDP) is very likely that excellent results in range of budget revenues will persist for several months.