Central bank adviser: VAT rise to put Romania on fire

Publish date: 04-06-2010
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If Romania must increase the Value Added Tax (VAT), it has to be increased by at least 5 percent, and what's coming next will ‘set the country on fire', the Romanian National Bank (BNR) Governor's advisor Adrian Vasilescu said, warning against the peril, a likely rise in the VAT would pose to Romania, in terms of inflation.

'In the negotiations between the International Monetary Fund (IMF) and Romania, BNR had one single proposal, namely never touch VAT, as far as we can keep it unchanged. To be effective, the rise in the VAT must be of 5 percent, at the lowest, and such a scenario would set Romania on fire, as a result of the soaring inflation and tax evasion,' Adrian Vasilescu told a TV channel.

Vasilescu stressed that at the moment Romania's priority is not the political fight but to get the next money tranche from the International Monetary Fund.

'We assumed we would take several steps by June 1, measures that we've failed taking, yet. If we fail resolving the problem, Romania will miss the IMF installment and the loans from the European Union and the World Bank, afterwards,' the BNR advisor concluded.


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