“Basescu should show us how to cover the deficit if we cancel excise tax, unless he wants
to be only a demagogue,” replied Ponta.
President Traian Basescu sent a letter, on Tuesday night, to Prime Minister Victor Ponta, asking him again to give up the application of the fuel excise increase scheduled on April 1, the head of the state adding that this step ‘would put an exaggerated and pointless pressure on the economic environment and on the consumers’. Basescu stressed that the 0.42 lei raise of the excise per litre of gasoline and diesel would result in an inflation-generating price surge and in a consumption decline both for individuals and for the companies.
‘As regards the carriers, a raise of the excise by 7 eurocents per litre would lead to a loss of competitiveness at regional level, with a direct impact on their turnover. In the domestic context, this tax increase would force the carrier companies to transfer these costs to the end users, thus generating price raises. Another sector potentially hit is agriculture, which in 2013 contributed decisively to Romania’s economic growth above the expectations. A 7-eurocent excise increase only hinders the continued development of this sector, especially if the weather conditions are not as favourable as last year. For the population, the price hike results in significant unbalances between the purchasing power and the income,’ the president explained, according to the Presidential Administration. Therefore, Basescu asked the prime minister to consider the abandon of this excise increase.
The reply of the PM came fast. Ponta asked the Head of State on Wednesday to point out the source to cover the losses in revenues resulting from cancelling the excise tax. “The idea that we could take the money from Dragnea is not valid anymore, as the Ministry of Development has a budget three times lower than Udrea used to have. If you want to be earnest, not a demagogue finishing his mandate and ready for retirement, you have to be serious and say where we should cut the funds from, in order to pay Basescu’s pension,” the PM said. He added that the budget on this year, already agreed with the International Monetary Fund, cannot be altered unless “our only aim is to see PMP growing at elections.”
During the government meeting yesterday PM Ponta said the fuel excise will be applied in April, while the executive is set to apply a set of fiscal measures to allow carriers which are not involved in fiscal evasion deeds to recuperate an important part of the amount paid for this excise. “We need to adopt some fiscal measures to let them remain competitive and, on the other hand, to fight fiscal evasion and unfair competition,” the head of government said.
Minister of Finance: No excise tax, no pensions money
Minister of Finance Ioana Petrescu claims that the payment of pensions and salaries for public servants might be jeopardized unless the excise tax of 7 Eurocents will be enforced as of April 1, as the amount to be collected is RON two billion, and cannot be easily replaced. “It is absolutely vital we adopt this tax,” said Petrescu for Adevarul Live.
She said that RON 670 million have already been lost as this excise tax has not been collected over the first three months. The official admitted the money from this excise tax are not specially meant for motorways, as Prime-Minister Ponta initially announced in the autumn of 2013, motivating that “the law does not allow” directing some money to funds specially created for such purposes. “I would like to tell you from the beginning: I do not take any joy in applying any tax, if it were for me, I would not put any tax (neither the extra excise tax nor “the tax on pole”). However, these taxes are necessary sometimes to cover the needs of the budget and, like I said before, this money goes to schools, hospitals, motorways. This is the general consolidated budget,” explained the minister. Petrescu said the decrease in the fuel consumption cannot be estimated at the moment, as it depends on oil companies, if they are going to transfer to the price most of the new costs, and whether the drivers will have any alternatives.