Romanian Socialists resuscitate Liberals’ VAT rate cut project

The managing body of the Chamber of Deputies (the Bureau), still under the control of the Social Democrats (PSD), has placed on the agenda of the Romanian lower chamber a bill drafted earlier this year by the current ruling party - the National Liberal Party (PNL), which provisions a deep 3 percentage point cut in the standard VAT rate plus the broadening of sector to benefit from preferential VAT rates.

The Chamber of Deputies has the final word on this bill, already passed without an actual vote by the Senate on October 21, before the Liberals came to power in early November.

The Liberal finance minister Florin Citu strives to keep this year’s budget deficit “as close as possible” to 4% of GDP and targets 3.6% of GDP deficit for 2020.

Cutting the VAT rate even by a small amount would further complicate his mission. In fact, this was the declared intention of the Social Democrats. Senator Paul Stanescu, PSD’s secretary general, said in Slatina on Thursday that his party will pay particular attention to the "slippages" of the PNL Government, and will bring back on the agenda all the bills promoted by the Liberals during their opposition period to the PSD ruling.

The PSD also plans to cancel the measures taken at the end of 2018 though emergency ordinance (OUG) 114, known as the “greed tax”.

More precisely, the Social Democrats plan to remove any regulated gas and electricity prices (which they promoted in the first place) so that the gas and electricity prices paid by household consumers rise during the cold season, according to G4Media.ro.

Such measures are aimed at making things difficult for the Liberal Government and determine the Liberals to rapidly lose their electoral support.

PNL currently leads the electoral polls with about 10 percentage points ahead of PSD.

Romania will organize both local and parliamentary elections in 2020.

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