The Democratic Party is asking the Ministry of Finance to consult the business community before acting on its plans to reimpose a standard VAT rate for the hospitality industry and cancel tax-exempt meal vouchers, among other measures designed to reduce the budget deficit.

“In the hospitality industry it is very difficult, if not impossible, to document with invoices the entire value chain of products, consumables and services. Taxation and documentation at such a level in this industry is just too burdensome. The reduction (of the VAT rate) from 20% to 10%  was intended as an encouragement for this sector to come out of the shadow economy, create new jobs and start more small enterprises,” PDM group deputy leader Vladimir Cebotari told a press briefing.

Cebotari argued that halving the VAT rate for the hospitality industry “hasn’t cost the budget a single leu”, and economic operators have been happy to operate legally. But with the prospect of the increased VAT, “the small entrepreneurs in this sector will have to choose between hiding their books under the table and closing down. As many as 30,000 people could lose their jobs,” warned Cebotari.

At the same time, the Democratic lawmaker says the cancelling of the meal vouchers could affect 50,000 employees. “While it is true that the vouchers are tax-exempt, the state isn’t losing anything, technically speaking. It is a form of increasing citizens’ well-being,” said Vladimir Cebotari, adding that the government is now trying to take away this employee perk.