Ponta Gov’t proposes new fiscal measures to stimulate economy

One of the topics of the yesterday Parliament debate included the idea that the Executive would adopt the decision on the renewable energy quota to be subsidized tomorrow.

Prime Minister Victor presented yesterday a package of measures to stimulate the economy in a plenum Parliament debate organized by the Chamber of Deputies upon request from PNL. Other topics of the debate included the non-taxation of reinvested profit, 5 percent cutbacks in employers’ CAS, or consumer energy prices.
“After the catastrophic situations between 2009 and 2011, 2012 was Romania’s time to exit the excessive deficit procedure, and 2013 brought a 3.5 percent economic growth. As far as our plans are concerned, it is extremely important for Romania to maintain its competitiveness and absorption rate of European funds,” the PM stated.
Regarding energy prices, Ponta announced the Government would adopt the decision on the renewable energy quota to be subsidized tomorrow, so that consumer and industrial prices will continue to drop. Also tomorrow, the Government will discuss eliminating the export co-generation tax in order to promote exports on the regional market. Where gas prices are concerned, household consumer prices will go up by 2 percent as of April 1, whereas the reference price for consumers on the free market will be the same as on January 1.
“In addition to energy prices, the budget fiscal regime must ensure predictability. We are determined to implement the objectives on our governing agenda as of April 1 – 5 percent cutback in employers’ CAS and tax exemption for reinvested profit. Some have said these measures were agreed upon with our international partners. Since we are referring to the letter of intent signed by Daniel Chitoiu, this is not true; it is the Government’s plan to lower these quotas,” Ponta added.

The cutback is a mandatory requirement on the Government agenda and it is aimed at maintaining economic growth. “I urge the Parliament to lower these rates,” Ponta said further. According to the PM the 5 percent cutback in CAS in the second quarter will have a RON 2.6 billion impact. The Government intends to reduce expenditures where possible and obtain additional revenue where possible.
The Liberals have asked the Government to adopt the CAS cutback and tax exemption measures before May 1, 2014, PNL leader Crin Antonescu had announced in early March, while pointing out that otherwise his party would file a censure motion.
“PNL’s decision is as follows: we ask the Ponta Government 3.0 to adopt the measure of cutting back employers’ CAS by 5 percent and the tax exemption for reinvested profit measure by May 1. If this does not happen, PNL will file a censure motion,” Antonescu said. He added that “several vague, general ideas” were presented in the political program assumed by the Government, but no clear deadlines were set for implementing clear measures.

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