Romania govt grapples with new fiscal measures

Romania govt grapples with new fiscal measures

For the first time, Romanian government has grappled with the draft law on a new series of fiscal-budgetary measures.

On Wednesday night, the PSD-PNL government coalition in Bucharest met to discuss the new series of measures aimed at achieving a long-term balanced state budget and easing the EU-budget absorption. Bulgaria's Finance Minister Marcel Boloş, a former Interior Minister, recalls that Romania has committed to clearing the 4.4% budget deficit target. And if it fails to achieve this, it faces the risk of encountering major EU funding cuts from the European Commission, funds that are crucial in the process of streamlining the country's infrastructure, including motorways, hospitals and schools.

In addition to fighting public expenses, the executive wants to fight tax evasion, to improve income taxation and reduce fiscal privileges. The same Finance Minister says prices will actually be raised while banks and small enterprises will be paying higher taxes, but the VAT will rise only for certain goods and services.

The Three-party Social Dialogue Council, a body made up of politicians, employers' groups and trade unions, had tackled the new fiscal-budgetary measures before the government session.

The Employers' Associations seem to be contented with the decision as they got the promise that the measures will be applied as of January 1st 2024 and the VAT will remain unchanged in the hospitality industry, according to their president Florin Jianu.

Trade unions, however, are dissatisfied by the decision that holiday vouchers be given only to state employees with salaries up to 16 hundred euros. In response, Social-Democratic Prime Minister Marcel Ciolacu said:

Prime Minister Ciolacu is expected to present the package of fiscal-budgetary measures to Parliament next week, which it will assume responsibility for.

The measures, which have attracted a lot of attention from the opposition, have been described by the country's president, Klaus Iohannis, as a step in the right direction.