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December 2, 2022

Fiscal Council President Ionut Dumitru about fiscal relaxation: Shock in fiscal system will be big, positive effects, not instantaneous

The shock in the fiscal system will be quite big after the enforcement of the fiscal relaxation measures and the positive effects resulting following these measures will not come into view immediately, so the revenues to the budget will go down, Ionut Dumitru said within a specialty event.
‘The shock is quite a big one (…) and the positive effects that will materialise, such as more jobs, higher economic growth, do not occur immediately,’ Ionut Dumitru mentioned.
He explained that much prudence is needed in this respect, ‘because each month salaries, pensions and paid, and these are not small amounts.’
‘We all agree that we need a taxation reduction in Romania, especially in the VAT and social contribution area, but we must think this path very well, because one cannot play with the figures. We must have very well grounded impact studies. And even if they are very well grounded, we are speaking of many uncertainties, behaviours that will not be easily shaped. Starting from the premise that starting January 1 the VAT should go down 4 percentage points, the fuel excises, by 20 per cent, the tax on dividends and the fee on posts, eliminated, what is there to be done on the short term? We can find that, on the short term, until the positive effects we are counting on in economy occur, we can find that there isn’t enough money in the budget,’ Ionut Dumitru mentioned


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