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Romania considers zero VAT on food as inflation rises

Inflation hits 8.2% prompting food VAT cut following domestic electricty reduction

Inflation in Romania has now hit a 10-year record at 8.2% in December. It started the year at 3%. The government is therefore discussing cutting VAT on basic foodstuffs from 9% reduced rate to zero. It would look to pay for the subsidy with a windfall tax on energy companies.

Food VAT cut follows domestic fuels reduction

VAT cut on domestic electricity from April is also being pushed. Although this could be brought forward to February.

Check which other EU states have cut domestic energy VAT on inflation concerns. Costs of European electricity hit new highs this month as it faces energy shortages as economies recover from the pandemic, boosting demand.

In December 2021, EU finance minister agreed new reduced EU VAT rate setting freedoms which should come into place before April 2022.

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