Romania's VAT Hike: A Simple Equation Exposes a €30 Billion Problem

Romania's Proposed VAT Hike: A Mathematical Impossibility? Romania's government is facing criticism over its plan to increase the Value Added Tax (VAT) by two percentage points. Economist Lulea Marius Dorin highlights the mathematical flaw in this proposal, arguing that with a budget deficit exceeding €30 billion and current VAT collection below €25 billion, such an increase is impossible without substantial spending cuts. "The government's math is simply wrong," Dorin states in a recent video. He uses a straightforward equation to demonstrate that a 2% VAT increase would only generate an additional €2.5 billion, far short of what's needed to address the deficit. The video has sparked debate online, with many questioning the government's economic strategy. The government has yet to respond to these concerns, leaving many wondering if the VAT increase is merely a political maneuver.