Social security tax cut to reduce state revenues by EUR 1.1 bln in 2015

The Romanian government has failed to convince the mission of the International Monetary Fund IMF that it can fill the gap of income that will result in 2015 from the cut in social security tax (CAS). This measure will generate an estimated loss of RON 5 billion (EUR 1.1 billion) in 2015, when the budget deficit has to drop from 2.2 percent to 1.4 percent of GDP, according to governmental sources cited by local Mediafax. Romanian Prime Minister Victor Ponta recently said that the CAS will be cut by 5 percentage points from October 1, impacting the budget by RON 850 million (some EUR 190 million), without increasing the budget deficit. He added that this measure doesn’t have the approval of the International Monetary Fund IMF, but it is taken on by the Government. Romania to cut social security tax in October. Irina Popescu, irina.popescu@romania-insider.com