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September 28, 2021

Budget rectification, agreed with IMF

State employees will have their salaries increased by 7.4 pc as of December. The government plans to enforce the differentiated income tax as of 2013, but the maximum tax level will not exceed 16 pc. The budget rectification – at the end of August.

The budget rectification has been agreed upon with the International Monetary Fund (IMF) and provides for a second phase of salary increases in the public sector, by 7.4 pc, starting December this year, Finance Minister Florin Georgescu said yesterday at the Victoria Palace, after attending – jointly with PM Victor Ponta – a meeting with the delegation of the International Monetary Fund, European Commission and the World Bank. In his turn, PM Ponta said that the ongoing talks with the IMF did not influence the decision of raising salaries in the public system, as this issue has been clarified during the previous mission of the Fund. Also yesterday, the IMF delegation met officials of the National Bank of Romania, with the talks focusing on the current economic situation of Romania.The MFP official added that the budget rectification will be operated at the end of August, while regarding the five measures of economic recovery he mentioned that there are favourable conditions for enforcing all these measures, and talks will be held with the IMF at the end of this week, after the letter of intent will be submitted to the IMF on Friday. Florin Georgescu avoided saying, at the end of negotiations with the Fund, if the government maintains its economic growth target of 1.5 pc for this year, only mentioning that the budget deficit forecast will not be modified. According to sources quoted by Mediafax, IMF experts will accept and economic growth above 1 pc for this year, despite the poor agricultural output and the economic slowdown of the euro zone, while the estimated nominal GDP will slightly decrease compared to the current forecast, from RON 607.5 bln to RON 607.33 bln, with a deflator increasing from 3.3 pc to 4 pc. Another important matter discussed with the IMF delegation was the government’s proposal to enforce the differentiate tax starting 2013, with the maximum level of the tax not exceeding 16 pc and the minimum being 8 pc. Asked about the impact of this measure upon the budget for next year, the Public Finance Minister Florin Georgescu said that he will not talk about hypotheses regarding the construction of the budget for 2013, because such an evaluation can be made “only based on the specific figures.”All the changes of the fiscal system, with regard to taxes and dues, will be implemented only if approved by international lenders, the head of the Executive assured. He mentioned that the government is determined to keep and observe all the macroeconomic conditions agreed with the international partners, which refer to budget deficit, public debt and structural reforms. Ponta explained that the partners appreciated the adoption of the legislation for the electricity and gas sector, and authorities will continue the approaches in view of listing on the stock exchange and privatising state companies. A special tax might be imposed on the companies dealing in the natural gas and electricity sector, so part of the extra profit they obtain from the liberalisation of gas and electricity prices enters the state budget.The privatisation of stakes held by the state continues


Speaking about the problems of Hidroelectrica, Victor Ponta said that the company “will return to its normal legal status in September – October, much stronger, and will represent a real asset for the state, a positive element we own.” As for Transgaz, the deadline agreed with the IMF for listing the company on the stock exchange is mid-September. Initially, Romanian authorities promised to the IMF that they will organise the public offer for the sale of 15 pc of the company until the end of June 2012. Lastly, in the case of Oltchim, the investor that will be selected will have to secure the jobs, also those of the horizontal industry, and the economic stability of the company.

Charging the VAT the moment when the invoice is paid, starting 2013 at latestThe government will enforce, at the beginning of next year at latest, the system of charging the VAT the moment when the invoice is paid, for the companies with a maximum turnover of EUR 500,000, if payments are conducted via the bank, but the moment when this will come into force is still discussed with the IMF, Premier Victor Ponta announced. Talks with the IMF will continue at the end of this week, he added. Also in 2013, authorities will decide whether to sign a new preventive agreement with the IMF, after the parliamentary elections.

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