Romania’s Finance Minister says changes to the Fiscal Code will bring next year’s budget deficit down to 2%

Finance Minister Eugen Teodorovici said yesterday that the budget deficit estimated for 2016 will drop to about 2% following the gradual reduction of the VAT and the removal of the extra excise on fuel starting 2017. The deficit will go down by about 0.5-0.6% compared to the Government’s initial estimations, which took into consideration more tax cuts. However, Romania still won’t be able to meet the agreed deficit target of 1.2% of the GDP for the next year, Teodorovici said, at the end of the meeting with parties’ representatives. The removal of the extra excise on fuel has a budget impact of EUR 608 million (without VAT), whereas the removal of the tax on special constructions creates a EUR 225 million negative impact on the budget. The National Liberal Party asked not only for the reduction of the VAT to 20% but also for delaying the removal of the extra excise. It also said that the Government should present the budget targets in the Parliament every month. Romania’s political parties agree to cut VAT rate to 20% Romania’s Government wants to build budget for 2016 with 1.2% deficit editor@romania-insider.com