Governments sees 24% VAT ordinance endorsed by the Senate

The Senate yesterday approved with a tight vote the emergency ordinance that increases the VAT from 19 to 24% but things are far from settled, because the normative act has to pass through the Chamber of Deputies, where the government has weak support as it does in the Senate. Economists believe the rejection of the VAT raise and the return to 19% tax would only serve to worsen the perception of instability of the fiscal policy and make keeping the agreement with the IMF more uncertain.
The Budget-Finance Committee of the Senate had modified the emergency ordinance (OUG) 58/2010 on Monday night, rejecting the VAT hike from 19% to 24% and causing anxiety among ministers, many of whom went to the Senate together with Premier Emil Boc.
The Committee had also approved an amendment of the PNL (National Liberal Party) and PSD (Social Democratic Party) opposition to cut VAT to 5% for staple foods.
Finance Minister Sebastian Vlădescu yesterday asked the senators to endorse the 24% VAT, that is vote Ordinance 58/2010 in force since July 1 without any amendments.