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December 7, 2021

Businessmen about CAS: Agree, but a real risk regarding the budget

Raiffeisen Bank CEO Steven van Groningen, a member on the leading board of the Foreign Investors Council (FIC), said last week after consultations with President Traian Basescu that business representatives agree in principles with cuts in the social security contributions (CAS), but he said there is a real risk of Romania’s national budget exceeding the imposed limits. He said his conversation with the president was open and presented opinions of representatives of the Association of Romania’s Business People, chambers of commerce and FIC. Van Groningen said it is clear that there will be a big deficit that has to be covered and the way to do so is by taxation, which is an existing worry. He added that cutting taxes today only to increase them again in the future is useless.
Van Groningen mentioned that the opportune time for CAS cuts will be when there is an element of comfort that the measure could be implemented without the need for new taxes in the future. He added that the main message of President Traian Basescu was that a short-term measure should not lead to a situation able to generate serious effects such as endangering the arrangement with the IMF, or a situation in which Romania would have to give up on any important principles, such as the flat income tax.
In his turn, president Basescu said in a press release that he is a supporter of a tax cut in Romania and that reducing CAS is desirable, provided that the budget sources for offsetting this measure are clearly identified.

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