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January 18, 2022

IMF: Any exemption from the increase of the fuel excise must be compensated

Any exemption granted from paying the supplementary excise on fuel enforced on April 1 must be compensated through measures “with strong impact,” so it does not endanger the budget deficit target assumed by the government, the head of the mission of the International Monetary Fund (IMF) in Romania, Andrea Schaechter said.
“The excise on fuel is an important element for reaching the budget deficit targets and any decision that grants exemptions to transporters or heavy trucks would result in a fiscal gap that should be compensated by measures with a strong impact, so the budget deficit for this year and for the next year are reached,” Schaechter said in a press conference held by phone from Washington, when asked about the government’s decision to grant transporters an exemption from the increase of the excise on fuel, Mediafax reports.
The government assumed in the accord with the IMF a budget deficit of 2.2 pc of the GDP for this year. Romania enjoyed the confidence of financial markets in the context of the volatility experienced by emergent markets at the beginning of the year, and authorities must not endanger this confidence, the IMF official warned.
“Meeting the fiscal commitments is very important in a global climate where markets showed high confidence in Romania,” Schaechter mentioned. The increase of the fuel excise by 7 eurocents per liter came into force Tuesday, raising by 0.41 RON/liter the price of leaded and unleaded petrol, diesel and kerosene, according to estimations made by the Ministry of Finance. According to previous calculations, the excise on fuel will bring approximately RON 2.5 bln to the budget. The money collected from the supplementary excise on fuel can be used as co-financing and for the construction of motorways, Transportation Minister Dan Sova said yesterday, adding that the projects will be decided each year by Government and Parliament.
In a different move, the IMF recommends BNR to keep unchanged, for the time being, the key interest rate and the reserve requirements.
PNL calls for postponement in implementing fuel excise tax
Yesterday, the Chamber of Deputies approved the proposal on sending EGD 111/2013 – on the implementation of increased gasoline and Diesel fuel excise taxes as of April 1 – back to the Specialized Commission, submitted by PNL leader George Scutaru, Mediafax informs. Emergency Ordinance 111/2013 stipulates that the increase on Diesel fuel and gasoline excise taxes be postponed from January 1 until April 1, 2014.
George Scutaru justified his proposal to send the ordinance back to the Specialized Commission within one week by arguing it needs to be discussed jointly with EGD 102/2013 regarding the implementation of the 7 eurocents fuel tax. Valeriu Zgonea, Chamber of Deputies chairman, pointed out that pursuant to regulations the two ordinances cannot be discussed simultaneously in view of a joint report, but announced the proposal to send EGD 111/2013 back to the commission has been put to a vote. The proposal was adopted with 82 votes in favor, 76 against, and two abstentions. Nonetheless, the ordinances have taken effect and their consequences are visible. PNL will not vote for the gasoline and Diesel fuel excise tax imposed by the Ponta Gov’t, Scutaru underlined, saying there are no guarantees as to how the Executives plans to use this money.
President Traian Basescu on Monday evening reiterated, at B1 TV broadcaster, that there is no need to raise the excise for fuel to build motorways, since the money for that purpose – EUR 1.5 billion – already exists.
‘All the Ministers of Transport considered as priority the rehabilitation of the existing national roads, which were too narrow and now are broader. They had to take this as a priority, instead of the motorways, which are much more expensive. But, of course, we can build them now, while pretending that we still need an additional tax to be able to do that. It’s a lie. The reporting from February 28, 2014, showed that from a total of 4.28 billion, 1.38 billions vanished somehow, but there are still 3 billion available for motorways and railways, 1.5 billion for motorways and 1.5 bn for railways that is,’ Basescu told. He also said that it’s a lie to pretend that Romania’s contribution needs to account for 25 percent, given that we are in a program with the IMF, while the EU contributes 95 percent.

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