Romanian President challenges law that removes over 100 taxes at Constitutional Court

Romanian President Klaus Iohannis decided to challenge the law that removes 102 non-fiscal taxes at the Constitutional Court, on Tuesday, November 15. The Chamber of Deputies unanimously voted the law on October 25. The law was promoted by the leader of the Social Demiocratic Party (PSD), Liviu Dragnea. The most controversial measure included in this law is the elimination of the radio-TV tax, one of the main financing sources for the public radio and television. The notification letter the President sent to the Constitutional Court states that the law “violates the constitutional rules on the principle of separation of state powers and legality, the Parliament’s relations with the Government, the role of the Government, and the rules governing the national budget.” The law violates the constitutional norms, as well as the fiscal responsibility law, and the law for approving the ceilings of some indicators specified in the fiscal-budgetary framework for 2016, according to the President. Klaus Iohannis also says that the lawmaker should have identified the specific source of financing for the law enforcement given that the simultaneous elimination of a significant number of taxes implies a major reduction of budget revenues while the public services for which the taxes were being paid will still be provided. “From another perspective, we present the fact that the law lacks predictability and consistency, since it doesn’t comprise legislative solutions for all the effects that the imposed measures would produce,” reads the notification letter. Referring to the radio-TV tax, which should also be removed according to the new law, Iohannis says that the “provisions’ inconsistency” could create interpretations on the status of the national television’s employees, if the institutions would still be financed from the state budget, and can affect the autonomy of the public radio and television. The President also says that the new law could lead to a budgetary imbalance, with the consequence of not meeting the medium-term objective (MTO) in 2017, 2018, and 2019, and failing to meet Romania’s obligations. Finance minister Anca Dragu announced at the end of October that the Government considered challenging the law at the Constitutional Court. At that time, Dragu said that the law project didn’t mention the financial sources to cover for the removal of these taxes. Irina Popescu, irina.popescu@romania-insider.com