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January 28, 2022

UDMR might support VAT cut during consultations with PNL and PSD

Chairman of the Hungarian Democratic Union of Romania (UDMR) Kelemen Hunor on Wednesday told radio station RFI that the Union might support the reduction of the value-added tax (VAT) in several stages, during the consultations with PNL and PSD, and noted that the Finance minister or the prime-minister should show, with accurate figures, that there is no risk associated with the adoption of the Fiscal Code.

‘We might consider the VAT cut in several stages, the important thing is to act cautiously, not to endanger what we have achieved these past few years, as there has been a common sacrifice and the citizens’ sacrifice should not be flushed down the drain, it wouldn’t be fair and it wouldn’t be normal. This is why I believe we could consider several stages for the reduction of the value-added tax from 24 to 22 or 21 and see if the budget withstands that, if the revenue does not drop, if a certain part of the current untaxed economy could be made pay taxes by reducing VAT, if, indeed, we an draw European funds for investment, for there we have a problem, we are not using European funds for investment, then we can move to the second stage of VAT reduction’, Kelemen Hunor said, according to RFI.

The leader of UDMR also said the Government ought to bring accurate figures to the consultations with the parliamentary parties and reminded that both Central bank Governor Mugur Isarescu and other ‘lucid people’ had said the sudden cut of VAT by five percentage points would widen the budget deficit.

‘Either the minister of finance or the premier should come and show us with accurate figures, with revenue, expenditure and projection over the next two years at least that there is no risk. I cannot say right now if there is one, but there are voices – from the Central; bank governor to other lucid people – who say that there is a rather major risk in suddenly cutting VAT by five percentage points, we may not collect the necessary revenue, the deficit could grow and so on’, Kelemen Hunor said, according to RFI.

PNL Co-president Vasile Blaga said on Monday, in the context of the debate on the re-consideration of the Fiscal Code, that the reduction of VAT might be operated in two stages, to 21% on 1 January 2016 and then to 19% on 1 July.

PNL is proposing to the other parliamentary parties to meet for talks on economic macro-stability on 17 August.




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