Econ Min Says Current VAT, Social Contributions Hinder Romania”s Economic Growth

Economy Minister Varujan Vosganian on Thursday said Romania will never post an annual economic growth above 4% unless it changes its sales tax and social security contributions.

Speaking at a conference organized by Ziarul Financiar, the minister said Romania should focus next year on reducing its VAT and social security contributions to help its economy grow above 4% annually.

Vosganian also said the country”s industry is „on the right path,” as the industrial output rose over 8% in the first four months, with exports reaching EUR13.17 billion and imports amounting to EUR15.3 billion. He added the trade deficit stands at EUR1.6 billion and the current account deficit is „almost insignificant.”

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In March this year, Vosganian said the government might reduce the sales tax and social security contributions if the country”s economy grows by 1.5% to 2% this year.

Romania”s GDP is expected to grow by 1.6% in 2013.

In June 2010, Romania increased its sales tax to 24% from 19%.