Romanian government on Tuesday decided to cut the Value-Added Tax (VAT) of bread from the current 24 percent to 9 percent, announced the government press office.

The cabinet adopted a simple ordinance in this end and the measure will come into force as of Sept. 1.

Meanwhile, the government decided to increase the excise tax on alcohol and to expand the scope of harmonized excise tax for a number of luxury goods: gold and platinum jewelry, natural fur garment, cars with engine capacity equal or greater than 3,000 cc, hunting guns and personal weapons, yachts and other vessels for pleasure.

Prime Minister Victor Ponta stated that the VAT will be cut back in the case of certain foodstuffs, as early as next year, provided that the measure applied to bread proves successful.

"I count on a partnership between the government and producers that will prove what I have claimed all along that a 9-percent VAT does not mean less revenue for the government, but fighting against tax evasion, and even additional revenue or a drop in bread prices," he told the cabinet meeting which adopted the ordinance on cutting the bread VAT.

He promised, "If this first project proves successful, then next year or when the conditions are in place, we can extend the cuts to other staple food."

The prime minister underscored that producers and consumers alike have to be supported for the measure to become a success.

"It is very important that the government does no remain on its own, but producers step in. And in the end, each of us, bread buyers, we can ask for a receipt at the cashier," said Ponta. Endi

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