Romanian Senate approves VAT cut for basic foodstuff and a rise in excise taxes for tobacco

The Value Added Tax (VAT) for basic foodstuff could lower from 19 percent to 5 percent after the Senate approved a proposal made by the Social Democrat Party (PSD), Romania's largest opposition group.

PSD also proposed for the pensions under 1,500 lei (412 euros) to be tax exempted and the increase of the excise taxes for luxury goods and tobacco. The proposal was not backed by the government.

The PSD members who sustain the measure argue the VAT for basic foodstuff in several European Union countries rises to maximum 5 percent. Both the Greater Romania Party (PRM) and the Conservative Party sustained the VAT cut.

The Senate approved PSD's idea after 45 votes were cast in favor and 16 against. The proposal will be debated by the Chamber of Deputies, which will make the final decision.

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