Fiscal package “mostly agreed” in Romania, but uncertainty remains high

The package of fiscal measures aimed at boosting the budget revenues was “broadly agreed over” by the ruling coalition, finance minister Marcel Bolos announced on September 4 - while admitting that rather radical steps such as the 1% revenues tax on large-sized companies and a special tax on banks are still on the agenda.

The companies would have to pay a tax of 16% on profit but not less than 1% of turnover, even if they are at a loss, Profit.ro reported.

The minister also mentioned an exceptional tax on the banking sector, following the model of Italy or Hungary.

The timing of implementing the fiscal package remains unclear, as enforcing all the measures as of January 2024 would leave this year’s fiscal deficit at 6.84% of GDP.

A decision regarding the Government’s plans to promote the whole package (including measures aimed at cutting public spending and fighting tax evasion) in Parliament will be made by mid-September after the discussions with the European Commission are completed, but the implementation date, says minister Bolos, will not be earlier than January 1, 2024.

The budget deficit for the first 8 months of 2023 is 2.66% of GDP (it was 2.4% of GDP in the same period last year), minister Bolos stated on a positive note. Later, he specified the amount of RON 45 billion, which accounts for 2.83% of the latest official GDP projection for the year.

The official full-year target is 4.4% of GDP, but the Government expects to convince the European Commission to accept a 5.5% of GDP deficit.

(Photo source: Gov.ro)