Romania is currently evaluating its strategy to address its VAT gap and stabilize the economy. The VAT gap in the country is estimated to be a significant 36.7% of the expected VAT revenue. In an effort to tackle this issue, Romania has introduced measures that require high fiscal-risk products to be submitted through the national e-invoicing platform.
One of the key proposals being considered by Romania is the implementation of a universal business-to-business (B2B) e-reporting and e-invoicing mandate. This would streamline the reporting and invoicing processes for businesses, making it more efficient and transparent. By embracing digitalization, Romania aims to enhance tax compliance and reduce the VAT gap.
The Romanian tax authorities are closely examining the current VAT rates to ensure they are appropriate and effective. As part of this review, there is a consideration to introduce a new 9% VAT rate for beverages. This lower rate would aim to stimulate the beverage industry and potentially boost economic growth. However, it is important to note that any changes to VAT rates require careful analysis and consideration of their impact on the economy and various sectors.
In addition to the proposed changes in VAT rates, there are discussions about increasing VAT rates on specific supplies starting from 2024. Categories that may be affected include social housing, solar panels, and specific food deliveries. These potential changes aim to align the VAT rates with the nature of the supplies and address any discrepancies or loopholes in the current system.
Furthermore, specific sugary foods are expected to be subject to a higher standard VAT rate of 19%. This measure is part of a broader effort to promote healthier eating habits and combat the rising prevalence of obesity and related health issues. By increasing the VAT rate on sugary foods, Romania hopes to discourage their consumption and encourage healthier choices among its population.
These proposed fiscal reforms have already been presented to the Romanian Parliament for further discussion and consideration. It is essential for policymakers to carefully evaluate the potential impact of these reforms on various sectors of the economy, as well as on businesses and consumers. Balancing the need for revenue generation with the goal of stimulating economic growth is a delicate task that requires thorough analysis and stakeholder engagement.
In conclusion, Romania is actively reassessing its strategy to address the VAT gap and stabilize its economy. The introduction of a universal B2B e-reporting and e-invoicing mandate, along with potential changes in VAT rates, reflects the country’s commitment to improving tax compliance and fostering economic development. However, it is crucial for policymakers to carefully analyze the potential impact of these reforms and ensure they strike the right balance between revenue generation and economic growth.
