The decision to reduce VAT on meat products to 9% in Romania is raising numerous questions regarding the actual beneficiaries. It will not bring down retail prices, the State will lose revenue and meat producers will be placed at a disadvantage. Similarly, VAT reduction in the bakery sector, far from reducing retail prices, has merely boosted profits.
Meat processors argue that VAT reduction in this sector will boost sales, thereby replenishing State coffers with an extra EUR 200 million in revenue as consumption increases and helping to strengthen the economy.
Following the Russian embargo, quantities of meat exported to Romania by Russia’s traditional suppliers have increased considerably. As a result, Romanian producers are facing keen competition in the form of large quantities of very cheap EU meat.
What view does the Commission take of reduced VAT on meat products in Romania and what action can be taken to protect the interests of its consumers and small-scale producers?
Can the Commission give any examples of good practice regarding successful tax reduction policies in the Member States?