Consumption bounced back after the VAT on agri-foods was cut to 9 percent
July 09 2015
Consumption bounced back after the VAT on agri-foods was cut to 9 percent, as statistics by national and international institutions consistently show a drop in prices says Minister of Agriculture and Rural Development Daniel Constantin.
"Statistics show that prices decreased as we expected, by 12 percent this June. Yet a legitimate question persists, that is whether this decrease set in after the prices were artificially inflated, or if this is a real decrease. That's the question we will get the answer for in the next period, as we collect the data through the Competition Council, which conducts an analysis on the matter, and we will process the monthly and yearly data released by the National Statistics Institute," Daniel Constantin declared and reported by Agerpress. He could not specify if the revival of consumption was real or the effect of the black market's dismantling. "No matter what reality is, the effect is very good. Today we see taxable sales by 12 — 15 percent higher, this is quite pleasing, that's exactly what we've been after: to revive consumption, to have the matching offer for the growing demand and automatically, the prices improve for the producers too. And that's what we want to stimulate in the next period," said the Minister of Agriculture. He underscored that relevant available data offer sufficient arguments for the Romanian authorities "to sit down with International Monetary Fund experts and tell them that they want to reduce the overall VAT rate of 24 percent as of January 1." Constantin added that achieving this goal would provide a solid base for the authorities' plans that would now rely on real figures to make their case before the IMF. "The first month, June, shows real increases, budget collections are higher with a 9 percent VAT rate. I hope this trend in budget collections continues in the coming months, allowing us to reference the planned VAT reduction to 19 percent as a sustainable measure before the IMF," the minister mentioned.
"Statistics show that prices decreased as we expected, by 12 percent this June. Yet a legitimate question persists, that is whether this decrease set in after the prices were artificially inflated, or if this is a real decrease. That's the question we will get the answer for in the next period, as we collect the data through the Competition Council, which conducts an analysis on the matter, and we will process the monthly and yearly data released by the National Statistics Institute," Daniel Constantin declared and reported by Agerpress. He could not specify if the revival of consumption was real or the effect of the black market's dismantling. "No matter what reality is, the effect is very good. Today we see taxable sales by 12 — 15 percent higher, this is quite pleasing, that's exactly what we've been after: to revive consumption, to have the matching offer for the growing demand and automatically, the prices improve for the producers too. And that's what we want to stimulate in the next period," said the Minister of Agriculture. He underscored that relevant available data offer sufficient arguments for the Romanian authorities "to sit down with International Monetary Fund experts and tell them that they want to reduce the overall VAT rate of 24 percent as of January 1." Constantin added that achieving this goal would provide a solid base for the authorities' plans that would now rely on real figures to make their case before the IMF. "The first month, June, shows real increases, budget collections are higher with a 9 percent VAT rate. I hope this trend in budget collections continues in the coming months, allowing us to reference the planned VAT reduction to 19 percent as a sustainable measure before the IMF," the minister mentioned.
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