Fiscal Council: Romania should first cut social contributions, not VAT

Romania should stimulate labor, rather than consumption, said Ionut Dumitru, president of the Fiscal Council. The state should first reduce the social contributions, and only afterward the VAT and the excise duties, to reach the necessary economic growth and enter the eurozone, reports local Agerpres. Romania needs sustainable growth; an increase of 4% - 5% may be a good solution for a year or two, but not on the longer run, as this would bring about inflationist pressures. Cutting the VAT by 6% in two years and the excises by 20%, as the current Fiscal Code project provides, without creating stimuli on the supply side, can result in excessive demand, which in turn produces imbalances in the economy. editor@romania-insider.com