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December 5, 2022

Tax Code: PM Ponta, decided to enforce the new fiscal measures either by emergency ordinace or by vote of confidence

Provisions of the new Tax Code rejected by President Iohannis and sent back to Parliament for re-examination will be put into effect anyway, by emergency ordinance or by seeking vote of confidence, Prime Minister Victor Ponta announced .In his turn, the  Finance Minister Eugen Teodorovici also assured  that all measurea in the new Tax Code will be found in the economy, using the two instruments at hand – either approval within the Government, or the organization of an extraordinary session of Parliament during this summer.

Ponta said late on Friday that amid the Tax Code rejection by President Klaus Iohannis, the Government will begin promoting its measures either by an emergency order or by taking responsibility.

Ponta also voiced regret that the political consensus on the Tax Code issue has been lost.

“I think that the Parliament and us, the Government will begin enforcing it either by an emergency ordinance or by pledging the responsibility on these measures, but you must know that the bad image remains and the businesses will say: ‘Oh, no, there is political strife again, we’d better kept our money and see. We’ll no longer put it into Romania, because it is not a country of serious men…”, Ponta told Romania TV private news channel.

The prime minister added: “I have solutions. I can adopt by emergency ordinance on Wednesday – in the same way that we adopted the slashed VAT on foodstuffs to 9 percent – I can adopt the 19 percent (VAT cut) or something else. Or I can go and take responsibility (before the Parliament) and they will most certainly not have votes for the motion of censure. The issue is another: this is not a message of coherence and political consensus”.

When asked whether he will contact the Romanian president to discuss the Tax Code issue, Ponta answered the finances minister had tried to speak to the head of state.

“Mr Iohannis didn’t even sought to contact me and tell me about the Tax Code, in spite of the fact it is the Government, not the Central Bank or someone else who enforces it”, the chief of the executive stressed.

President Klaus Iohannis on Friday sent the Senate the re-examination request on the Law concerning the Tax Code.

The head of state underscores that “the Legislature must promote a balanced and reasonable attitude, meant not to generate dysfunctions which, afterwards, may need frequent corrections of a legislative nature,” a reason for which “policies generating excessive taxation or accentuated relaxation should not be promoted in drawing up a new tax code.”

“The austerity measures of 2010 must remain history. Coming back to risky fiscal policies and with long-term negative consequences represents an experience which not only the political class can afford any longer, but, mostly, their costs should no longer be supported by the citizens,” Iohannis said in the re-examination request.

In his opinion, “the economic welfare unanimously desired by all political forces of Romania to the benefit of the citizens and the economic agents can only be reached through a responsible, long-term predictable tax-budget approach, in accordance with the sustainable economic growth objectives.”

“The mere fiscal relaxation, unaccompanied by the continuation of the process of increasing the revenue collection and by a sustainable resetting of the budgetary expenditure, for an as much reasonable as possible public money spending, may lead to accumulating imbalances which will encumber the future economic and social developments,” Iohannis points out.


“Maybe someone wants us to be colony, not powerful economy”


Prime Minister Victor Ponta also said late on Friday that one of the reasons why President Klaus Iohannis rejected the Tax Code might be that the head of state had preferred to apply the foreign interests that do not want Romania to have a powerful economy.

“It is either a kind of gamble for political stalemate (…), a very low one at that (…) or it is about interests outside Romania, Mr Iohannis could do nothing but apply them. Just look at how many foreign companies have opened and keep opening factories, production facilities, IT service centres, training centres in the last one and a half years. This means some are losing businesses because they move to Romania. (…) Maybe someone does not want Romania to be a powerful economy, they want us to be a kind of colony that buys goods made by others. But I think that my duty as a prime minister and the duty of the president of Romania is to defend Romania, not defend others who lose money or businesses because Romania is getting stronger”, Ponta told Romania TV private news channel by phone.

He added the Romanian president loses very much from a political viewpoint by rejecting the Tax Code.

“Politically speaking, Mr Iohannis loses very much and mostly loses before those who voted for him and who last year heard in his programme and in the PNL [National Liberal Party] programme about slashing the VAT to 19 percent. Now that it has been adopted, he is against it”, Ponta underscored, according to Agerpres.

He called “a lie communicated from off-the-record sources by some presidential advisor” the information carried by the media on Friday that the rejection of the Tax Code had allegedly come following the talks held by the head of state with the National Bank of Romania’s chiefs.


FinMin gives guaranteees that all measures in Tax Code will be found in economy


All the measures in the Tax Code, re-sent on Friday to Parliament by President Klaus Iohannis, will be found in the economy using the two instruments that we have at hand – either approval within the Government, or the organization of an extraordinary session of Parliament during this summer, Minister of Public Finance Eugen Teodorovici said on Friday.

“I assure all those who wish these measures to be brought to the economy (e.n. – provided in the Tax Code) that this will happen this year and maybe even a little earlier than the day that was initially put forth through this Tax Code sent to the President for promulgation. Certainly, all the measures in the Tax Code that was sent today back to Parliament will be found in the economy, using the two instruments that we have at hand, either approval within the Government, or through an extraordinary session of the Parliament during this summer”, Teodorovici told a press conference.

Asked how he will proceed to reduce the VAT before January 1, 2016, the Finance head showed that there are two legal instruments that can be resorted to in order to apply the measures provided in the Tax Code.

“There are two legal instruments: either the Government does it, through the ordinances it issues, or Parliament, through an extraordinary session, earlier than the autumn session”, he said.

Eugen Teodorovici expressed his confidence that the measures in the Tax Code will be found in the economy at the set deadlines.

“We will certainly succeed. The way in which these things will happen will be a nice surprise for Romanians and an unpleasant one for those who have opposed the Tax Code today,” the Minister emphasized.

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