News 21 Feb 12

Call to Drop Tax on Tourism in Romania

Minister plans to boost foreign tourism by scrapping VAT on visitors.

Marian Chiriac
Bucharest

Romania's new Minister of Tourism, Cristian Petrescu, says he supports cutting the VAT paid by travel agencies to bring tourists to Romania to zero.

“I will make a proposal about this to the Ministry of Finance. Such a measure would be good for the tourism operators, who would lower prices, making Romania a more attractive destination, ”Petrescu said.

“Once prices drop, the number of tourists should increase, and the earnings brought by these tourists will compensate for the reduction in VAT,” he added.

VAT on such services is currently 9 per cent for hotels and 24 per cent for travel agencies.

According to the latest data, the number of foreign arrivals in the first nine months of 2011 was of 5.9 million, up by 1.4 per cent compared to the same period in 2010.

Most visitors came from Hungary, Bulgaria, Germany, Italy and the US, according to the National Statistics Institute, INS.

Last June, Romania started a 5-million-euro campaign promoting the country’s tourism with commercials on CNN, Euronews and Eurosport TV channels, which are to be aired over a 12-month period.

But the country has a long way to go. Romania lags far behind such neighbours as Bulgaria and Hungary as a tourism destination.

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