Romania’s prime minister wants to force passing fiscal reform but measures are not clear yet

Romania’s Government plans to take responsibility in the Parliament for the fiscal reform, prime minister Marcel Ciolacu announced before the cabinet meeting on Thursday, August 24.

“The Government will assume responsibility in the Parliament for the legislative package aimed at the reform of the state apparatus, fiscal balancing measures and those to combat evasion. I will put my mandate on the table in Parliament, for reforms and social justice,” the PM said.

However, the ruling coalition made of the Social Democratic Party (PSD) and National Liberal Party (PNL) hasn’t presented yet the measures by which it plans to increase tax collection and bring down the budget deficit.

The latest scenarios under discussion included cutting public spending and jobs in the public administration, eliminating some tax breaks for companies and individuals, such as those currently granted to IT experts and construction workers, and introducing new taxes, such as a tax on turnover for large companies.

For example, it’s not clear if the tax on turnover would apply to companies with revenues over EUR 50 mln or EUR 100 mln or if the tax rate will be 0.5% or 1%, according to Ziarul Financiar. However, the Government reportedly aims to force large companies on a loss to pay the turnover tax.

“Budget waste and tax evasion are the brakes that hold Romania's development in place. We can't go on like this. Billions of euros end up in the pockets of swindlers instead of being used for roads, hospitals and schools,” Marcel Ciolacu said.

“State reform must be deep and irreversible, just as it can no longer be one rule for the rich and privileged companies and another for ordinary working people,” he added.

(Photo source: Gov.ro)