Romanian finance minister Florin Citu assured that the Government would not increase the VAT rate this year or next year.

The Government has resources to finance the budget deficit this year and has already identified resources for next year's deficit, Citu explained, according to Wall-street.ro.

It is not a good time to increase the taxes (since this would be a pro-cyclical policy), and the Liberal party believes in low taxes paid equally by everybody, the Romanian finance minister argued.

The statement came in response to the chief economist of ING Bank Romania saying that the Government might pursue a major budgetary correction after the elections, with higher taxes, and the VAT rate would be the most likely to rise in such a scenario.

"[T]here is still limited political visibility beyond the December elections, especially on the fiscal side, where we believe that a budget correction through a tax reform cannot be ruled out (a VAT increase is our main suspect)," the ING Bank economist said, Economica.net reported.

iulian@romania-insider.com

(Photo source: Gov.ro)