Romanian Govt To Hike VAT To 24%, From 19% - Sources

Romania’s Government has decided to increase VAT from 19% to 24%, leaving the flat tax as it is, and will also ask the Parliament to hurry the application of the bills reducing public sector salaries and recalculating special pensions, people close to the matter told MEDIAFAX on Saturday.

143 views

The proposal to hike VAT will be sent to the International Monetary Fund, whose board will probably hold a meeting Wednesday on whether to disburse the next installment of the EUR20 billion loan.

The Government will also insist that the Parliament amend the bills reducing public sector salaries and recalculating special pensions before the summer recess, so that the measures can be applied as of July 1.

The government recently sought a confidence vote in Parliament for a law package including a 25% cut in public salaries and 15% reductions in pensions and unemployment benefits.

The Constitutional Court Friday ruled the pension cuts unconstitutional and sent the law back to Parliament for revision. Other austerity measures in the law package were deemed as "disputable", but the court didn't see fit they should be reexamined in Parliament.

All the other measures, including the pay cut for state employees, are still standing and will be applied once they are published in the Official Journal, Prime Minister Emil Boc told a news conference.

If you liked this story, please follow MEDIAFAX.RO on FACEBOOK »

The content of mediafax.ro is for your information only. Republishing or using this content is forbidden without express consent of MEDIAFAX. For this consent, please ask for it by mail at vanzari@mediafax.ro.