Also in the news...
Paul Beare Wins IR Global Member Of The Year
Paul Beare has been named Member of the Year at this year’s IR Global Conference in Amsterdam.
The Biggest Problem With Running A UK Payroll
We explore the biggest problem with running a UK payroll, together with the required functions of payroll calculations and net salary.
Taking It For Granted: How The UK Government Helps Growing Firms
In the UK, a number of government agencies offer a range of grants to help smaller firms to grow and prosper. The grants are typically designed to support innovation, encourage job creation, and underpin growth. In the last few years, a number of new initiatives have emerged, including grants aimed at boosting green technology and digital transformation.
Start-ups Wasting Over 2 Weeks And £37 Billion A Year On Admin
UK start-ups and microbusinesses are wasting over two working weeks every year on admin tasks, including managing mobile phone contracts, choosing energy providers, and buying insurance – according to new research.
The Costs For International Businesses Employing In The UK
In an ever-globalising business landscape, expanding operations to the United Kingdom can be a strategic move for international companies seeking new opportunities.
Romanian MPS Finally Reach Agreement On VAT Rate Cuts
After being approved and then rejected by the President, Romania this week finally achieved cross-party agreement on the extent of VAT cuts; it will drop to 20% from next year, and to 19% from 2017. Romanian lawmakers agreed to shave 4.4 billion lei ($1.1 billion) off planned tax cuts, amid worries the proposals may blow a hole in the budget next year.
The original package included a cut in value added tax to 19% from 24%, as well as reduced levies on fuel and dividends. However, MPs across parties agreed to cut VAT to 20% from next year and to 19% from 2017.
The European Commission, International Monetary Fund, and Romania’s own central bank and Fiscal Council watchdog had all raised concerns over the scope of the initial proposed tax cuts. To address those concerns, the MPs agreed to cut VAT in steps and delay lowering excise tax on fuels until 2017.
The Prime Minister believes the cuts will help to boost growth and fight tax evasion.
Impact of the VAT change
| Positive impact | Negative impact |
|
|
|
|
|
|
Our experts say...
Romania once held the second-highest rate in the region (after Hungary’s 27% rate) but this reduction brings its VAT in line with its neighbours. It will be interesting to see whether this decrease will ultimately lead to an increase in consumption, better compliance and economic growth.