Romania is not the only country in the European Union to hike VAT to tackle the ballooning budget deficit. Greece, Portugal, Finland, and other Member States decided to raise VAT as of July 1. Wall-Street compiled a list of EU countries with the highest VAT, ranging from 21% to 25%.
5. Belgium, Ireland, Latvia, Lithuania and Portugal – 21%
Inhabitants of Belgium, Ireland, Latvia, Lithuania and Portugal pay a VAT of 21%.
The modification in VAT to 21% in Portugal will be effective as of July 1. The government has raised the VAT by merely 1% , although Portugal is facing a widening budget gap and soaring public debt.
4. Poland – 22%
VAT in Poland is 22%, higher than in any other Member State. Poland was the only country to record economic growth in 2009 while all its peers were facing a severe recession.
3. Greece and Finland – 23%
Due to the mounting public debt and budget deficit, Greece was forced to raise the VAT in an attempt to narrow budget gap. As of July 1, VAT in Greece will be raised by 2% from 21% to 23%.
Finland was another Member State to hike VAT by 1% to 23%, even though it managed to keep budget deficit in check.
2. Romania – 24%
Romania takes the second spot in the list of countries with the highest VAT as of July 1, with a 24% VAT, raised by 5% from 19 to 24%. The measure will put a crimp on the already weak consumption, and lead to a protracted recession in the country. Furthermore, inflation rate is expected to increase to around 7%, the central bank missing target by a wide margin.
1. Denmark , Hungary and Sweden – 25%
The biggest VAT among the Member States is 25% and is found in Denmark, Hungary and Sweden. Practically these taxes represent a quarter of every service or product price.
