Romania has the lowest collections as compared to the European average with respect to the budget revenues, with the collection level ranging between 27 percent and 29 percent, the Fiscal Council Chairman Ionut Dumitru told the Annual Conference of the Association of the Financial-Banking Analysts in Romania hosted by the National Bank..
‘For the taxation quotas we see a very imbalanced taxation system, for demographic reasons, because of the disproportion between the workforce and the high number of those included in the welfare system. Romania has a deficit of the pension system that is getting close to 3 percent of GDP at present. In order to be able to balance the situation, the pensions should be some 60 percent of what they are now’, Dumitru stressed.
The Council chairman said the value-added tax (VAT) quota also remains a problem for the economic environment and the cut VAT on bread failed to produce the anticipated results.
‘The VAT level is very high. Partial VAT cuts have had no effect. I am giving the example of the VAT on bread, at 9 percent, to which the result was zero. Those who used to pay before the cut are those who still pay now. As for the conditions, this year we will mark a historic low. We continue to see investments that make no sense’, Dumitru underscored.