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May 13, 2021
BUSINESS

19 pc VAT or 5 pc CAS, starting January 1st

Underground economy oscillates between 3.5 pc and 8 pc of the GDP, the minister of Finance, Daniel Chitoiu says.

The minister of Finance, Daniel Chitoiu announced on Realitatea TV that no tax will increase this year and, starting January 1st 2014, authorities plan to reduce either the contributions to the social security system, by 5 pc, or the VAT, restoring it to 19 pc. “We cannot implement both measures at the same time. Only one of them. The other after a year,” Chitoiu added.The Finance minister will make all approaches in view of reinstating the incentives for those who make performance in combating tax evasion. “If someone, a control team goes and uncovers a case of tax evasion amounting to EUR 1M, and recovers the money, I will stimulate them because if the state had not received the respective sum, it would have had nothing at all. And it is better to stimulate, because – in case you did not notice – if you stimulate someone materially and by other means, you push him towards achieving performance,” the minister explained.The minister of Finance also mentioned few ideas about the underground economy, stressing that although it is hard to quantify, it oscillates between 3.5 pc – 8 pc of the GDP. At the same time, 2-3 pc of Romania’s GDP goes to fiscal paradise countries, meaning EUR 3-4 bln. “This is Romania’s big problem, that the respective money leave the country, to fiscal paradises,” Daniel Chitoiu said, quoted by realitatea.net.Chitoiu added that the government wants to make new spending cuts. “In all state institutions, the central apparatus could sustain an average reduction of 15 pc.

On April 15, we want to go in the government and establish the personnel and spending cuts.”The discussions also referred to the measures of economic recovery that will be adopted by the government in the near future, such as reducing the VAT for bread as of July 1st, or implementing a state aids scheme allowing companies to access non-reimbursable funds, with the immediate objective of creating new jobs. Additionally, the cabinet took into consideration measures aimed at simplifying the fiscal system, including the enforcement of a 3 pc tax on turnover for the companies that made annual incomes under EUR 65,000, or a lump-sum tax in the case of certain categories of services, starting with the second half of this year.

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