VAT could be axed for hotels and tourist agencies
In an attempt to attract greater numbers of tourists, the minister of Regional Development and Tourism, Cristian Petrescu will propose that VAT charges connected with the accommodation of foreign tourists be abolished. Petrescu said his ministry will launch a study on the subject and submit it to the Ministry of Finance.
Currently, hotels charge 9 percent VAT while travel agencies have to demand 24 percent more for the state’s cut of their business. Petrescu argues that bringing these rates down to zero would be beneficial for the tourist sector and increase revenues by making Romania a more attractive destination.
Travel agency specialists agree that doing away with VAT on their services would indeed result in lower prices, and point out that in the 1990’s, agencies did not pay VAT on incoming visitors, as it was treated as a form of export. Approximately 1.3 million foreign tourists visit Romania each year.
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