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February 1, 2023

Satisfactory budget implementation, conducive to CAS cutback

The first quarter budget implementation is satisfactory, and in accordance with the first quarter results, it would be possible to cut CAS contributions.
“Our reported collections are higher and our expenditures lower than in the first quarter of 2013. At the moment, I am pleased because the first quarter results indicate we can go through with implementing a five percent decrease in employers’ social insurance contributions,” Ponta stated. He mentioned that the budgetary impact projected for this second quarter following the CAS cutback is RON 2.6 billion, and specified that the RON 5.5 billion figure announced by President Traian Basescu refers to the yearly impact. The Prime Minister went on to say Basescu is only “against it” because the proposal was made by the Gov’t. The RON 2.6 billion projection for the second quarter can be offset through other revenues, i.e. better collections and lower expenditures, but these issues will be discussed with the IMF in early June, Ponta explained.
In an ironic remark made Sunday, President Traian Basescu said that although he is not against cutting back CAS by 5 percent, he is “not clever enough” to understand how a measure that requires RON 5.5 billion can be supported.
The first quarter budget implementation was concluded with a RON 900 million deficit, accounting for 0.14 percent of the GDP, in decline from both February’s 0.46 percent of the GDP and the 0.67 percent of the GDP value reported in the same period last year.
Consolidated budget revenues amounted to RON 48.8 billion in the first quarter and accounted for 7.4 percent of the GDP. Compared to the same period last year, the revenues were 3.8 percent higher, according to data presented Friday by the Ministry of Finance.

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