Foreign investors request measures to compensate for effects of VAT increasePublish date: 02-07-2010
The Foreign Investors Council (FIC) asked the government to implement a package of measures to stimulate efficiency in the public sector and investments, in order to offset the negative effects of the VAT increase (by five percent, up to 24 percent).
Moreover, the foreign investors asked the Executive when it will publish the rules for the Emergency Ordinance No. 58 /2010, on the VAT increase, to consider very carefully the difficulties that might be triggered by the implementation of this measure, through including transitory measures concerning the VAT for services such as leasing, continuous services, etc. Also, the FIC appreciated that the government should continue to seek for solutions to further reduce public expenditure, the bureaucracy and improve its efficiency in the public sector.
According to representatives of the FIC, the increase of VAT will result not only in a drop in investments, in the context in which Romania will be one of the countries with the highest level of value added, but also other effects such as increasing inflation, depreciation of the national currency, drop in consumption, economic slowdown, tax evasion and lack of confidence on the financial markets.
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