CAS cut difficult to put into practice

According to Ionut Dumitru, Fiscal Council president, the five percent CAS cut will be very difficult to carry out unless tax collection is improved, given that over RON 1 billion in budget fees and taxes was not collected, Mediafax informs. At a conference in the field, the president of the Fiscal Council pointed to the need to expand the taxpayer base so as to include health insurance and pension systems because there are six million pensioners and “just over four million” wage earners. On the other hand, Dumitru noted that everything is possible as long as there is political will. In his view, the Public Finance Ministry has considerably underestimated the impact of reinvested profit non-taxation, which could reach from RON 500 million to RON 600 million per year. The impact would account for 0.3 to 0.4 percent of the GDP, a “rather substantial amount.” However, according to Finance Minister Ioana Petrescu, estimates suggest the budgetary impact projected for this year is RON 137.5 million. Nonetheless, Dumitru believes the measure as such is well-thought-out and will have positive effects on the economy. Also present at the event, Florin Danescu, executive president of the Romanian Banking Association (ARB), believes the Gov’t’s loan restructuring measure was devised for electoral purposes. He did not wish to offer further comments because his answer could be perceived as having political connotations.

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