Growth of VAT revenues slows down to 25%

The growth rate of revenues collected from VAT slowed down by nearly half in December against November, the lowest growth rate recorded after the VAT was raised by five percent.
The amounts collected from VAT were 25% higher in December against the similar month of 2009, while in November the rise was 44.7%.
The crisis saw Romanians cut their shopping budget for the holiday season. This was felt in the sales of retail players. Representatives of traditional retail also felt the consumption decline.
According to data from the National Statistics Institute, turnover from retail, which does not include car trade, posted an around 7% decline in November against the similar period of 2009. The auto market on the other hand saw nearly 11,000 cars sold in November, 12% more than in November of 2009, and nearly 6,800 in December, down 18%. December saw a 0.5% rise to 10,430 cars.
The Finance Ministry last year bet on a 7% increase in budget revenues against 2009, in the scenario that provided for the return to growth of the economy by 1.3% and for an unmodified flat rate and VAT.
It was hard to believe that such an increase in budget revenues was possible to attain if the main taxes remained as they were, with expectations not really upbeat about consumer spending and economy rebound.
For 2011 the Government seems to have ventured a rather optimistic budget, expecting nearly 7% higher budget revenues than those collected in 2010, risking to overestimate the ability to raise taxes.
Analysts have recommended caution, saying a 7% revenue increase would be possible only if the economy were to return to positive territory and post 2% growth, which is by no means certain.