VAT increase will rise producers’ profits, minister

Increasing the VAT for farm products from 8% to the standard 20% rate, as stipulated by the fiscal-budgetary policy for 2013, will increase profits for farmers and decrease them for “tick” firms, stated Minister of Agriculture Vasile Bumacov in a press conference. According to the Minister, the fact that the VAT will increase does not affect the producers’ situation, because the difference between 8% and 20% will be refunded. The modifications will affect only “tick” firms, which only profit from the current tax system. “Agricultural producers remember the nightmares of 2007, 2008, when there were only promises, but no refunds. Now, the Government set clear conditions, according to which the refund must be given within 30 days. Otherwise, penalties will be issued”, stated the Minister. Vasile Bumacov said that the Government has been offering support to producers for three years now, through international assistance totaling to 300 million lei, whereas the previous government, up to 2009, funded the farmers with only 114 million lei.