An increase in VAT means an increase in the tax on consumption, that is, on the goods and services we buy, whether it is supermarket shelves or heating in winter, a cinema or books.

In addition, the fee is reflected in the prices. Demand also plays an important role here, which, if it decreases, can cause pressure on the producer to take part of the costs, but in any case this affects either the price or the quality of goods or services.

In general, we observe the following phenomenon: when the VAT for certain industries decreases, the prices remain the same, when it increases, everything becomes more expensive. Let’s see what happened in 2018. VAT in Horeca and gyms has decreased to 5%, but prices have not changed.

Eating out can be expensive

The PSD-PNL coalition is considering raising VAT in restaurants from 9% to 19%. We could see some price growth here. It depends on when the consumer can bear it. If demand falls, firms may bear part of the costs.

We will see the effect if the decision is made, that is, after the appeal.

Let’s not forget that for restaurants we have changes from January 1, 2023: the specific tax disappeared, and companies had the choice between switching to income tax or income tax. Most chose income because they have to pay 1%.

In addition, in cafes, VAT has increased to 19%, but in many places they still operate at 9%, although there is a view of the Ministry of Finance that says that they should apply 19% from January 1, 2023, the change is introduced by OG 16/2022.

The list of price increases prepared by the Government in August 2023

In addition to eating out, there are other products and services that can become more expensive. Prime Minister Marcel Cholaku announced that we will have two VAT rates, respectively 9% and 19%. In other words, the 5% share disappears.

It is not yet clear whether some products with 5% VAT will go directly to 19%, that is, not just 4 percentage points, but 14 percent.

A decision on this issue can be made these days, especially since some fiscal measures are planned to be applied from September 1, 2023.

Services that may increase in price in 2023

1. Services consisting of providing access to:

• castles, museums, memorial buildings, historical monuments, architectural and archaeological monuments,

• zoological and botanical gardens

• shopping centers, amusement parks and recreation parks

• fairs, exhibitions and cultural events, cinemas.

• sports activities

2. Subscribers to gyms/fitness

3. Transportation of people by trains or historic vehicles with steam traction on narrow-gauge lines for tourist purposes or recreation;

4. Transportation of people by means of cable transport – cable car, cable car, chair lift, ski lift – for tourist purposes or for recreation;

5. Transportation of people by heavy vehicles used for tourist or recreational purposes;

6. Transportation of people on boats used for tourist purposes or for recreation.

7. Accredited public and private social service providers who provide social services

Products that may increase in price in 2023

1. delivery of school textbooks, books, newspapers and magazines on physical and/or electronic media

2. Prices for apartments/houses

Provision of housing within the framework of social policy, including the land on which it is built. The land on which the house is built also includes the area of ​​the house.

Here it comes:

• provision of buildings, including the land on which they are built, intended for use as orphanages and rehabilitation centers for minors with disabilities;

• delivery of buildings with a maximum useful area of ​​120 sq.m., excluding residential extensions, the value of which, including the land on which they are built, does not exceed the amount of 600,000 lei, excluding value added tax, purchased by individuals individually or jointly with another individual/other individuals. The reduced rate applies only to houses in which it is possible to live at the time of delivery. Any natural person can purchase, starting from January 1, 2023, individually or jointly with another natural person/other natural persons, one house, the value of which does not exceed the amount of 600,000 lei, excluding VAT, with a reduced rate of 5%;

3. Eco food products

Delivery of high-quality food products, namely mountain, eco, traditional products approved by the Ministry of Agriculture and Rural Development.

4. Delivery to individuals of firewood in the form of trunks, stumps, sticks, branches or in similar forms, as well as sawdust, waste and agglomerated wood scraps in the form of wood pellets, wood briquettes or in similar forms.

Supply of sawdust, waste and wood scraps for use as heating fuel.

5. Supply to legal entities or other organizations, including schools, hospitals, medical dispensaries and social assistance points, firewood in the form of trunks, stumps, sticks, branches or in similar forms, as well as sawdust, wood waste and scraps agglomerated in the form of wood pellets, wood briquettes or in similar forms.

The supply of sawdust, waste and non-agglomerated wood residues for use as heating fuel is carried out to legal entities or other persons, regardless of the organizational and legal form, including schools, hospitals, dispensaries and social assistance points, as end users, based on the declaration of self-responsibility provided to the supplier.

6. Supply of thermal energy in the cold season, intended for the following categories of consumers:

• people;

• public and private hospitals, public and private educational institutions

• non-governmental organizations regulated by law, as well as religious institutions.

7. Supply and installation of photovoltaic panels, solar thermal panels, heat pumps and other highly efficient heating systems with low emissions

8. If it is decided to increase excise duties on alcohol and tobacco, then there may also be an increase in prices.