The Romanian Parliament will convene on Monday at 3pm in an extraordinary session, to vote on the Fiscal Code re-examination request by President Klaus Iohannis, according to an announcement made by Speaker Calin Popescu-Tariceanu.
Fiscal Code agreement sets gradual VAT cut to 19pct, delayed drop of fuel extra-excise
The parliamentary parties’ representatives decided at a technical meeting on Thursday morning on the new Fiscal Code that President Klaus Iohannis had sent the lawmakers for re-examination that the value-added tax (VAT) be cut in two phases: to 20 percent from Jan. 1, 2016 and to 19 percent from Jan. 1, 2017 respectively.
They also decided to delay by a year moves to drop the extra-excise tax on fuel, which will be applied from 2017 rather than 2016 as originally set.
Finances Minister Eugen Teodorovici, who attending Thursday’s talks said a consensus was reached: “Firstly, the VAT will be cut to 20 percent from January 1, 2016 and to 19 percent from January 1, 2017. The second measure proposed by the [opposition] National Liberal Party [PNL] was to delay by a year moves to drop the extra-excise tax on fuel, which will be applied from 2017. These were the two measures proposed by the PNL”, he explained.
The minister underscored, however, that the 1.2 percent budget deficit target will not be possible to attain under the new conditions either.
He added the representatives of the political parties taking part in the talks requested that the Government should inform the Parliament every quarter-year about the manner that the budget is being implemented, so that the parliamentarians should exactly know that the budget deficit target is being observed.
Teodorovici announced that such modifications will also be discussed with the international lenders.
Minister-delegate for the relation with Parliament Eugen Nicolicea, the vice president of the National Union for the Progress of Romania (UNPR) stressed that the proposed modifications decided at the meeting will become amendments to the Tax Code when it is put to the legislature’s vote.
Liberal MP Eugen Nicolaescu announced that issues relating the budget expenditure, such as the public sector pay law will be discussed separately and will be subject to a separate political agreement.
As for the Fiscal Code, Nicolaescu said “the level of predictability has increased and is largely provided” following the talks among the parties. “I am speaking of the fact Romania, by the enforcement of the Fiscal Code, gets closer to the international commitment regarding the budget deficit. Romania, starting with this Tax Code, has guaranteed a range of provisions that ensure sound development of the business climate. By this Tax Code, Romania has made sure that its tax policy is competitive with the other countries in the European Union”.
The representative of the Hungarian Democratic Union of Romania (UDMR) at the talks, Iuliu Winkler said the tax reform that the Parliament triggers by the adoption of the Fiscal Code next week, even with the modifications made at the technical meeting, will bring about a sustainable growth cycle in Romania.
“The UDMR supports the Fiscal Code under the form it was adopted in Parliament, because it is a form that enjoyed broad political support”, he added.
Vice president of the Romanian Alliance of Liberals and Democrats (ALDE) Catalin Beciu announced that his party backs the Tax Code as having been voted for by the Parliament. “We want 19 percent VAT [from 2016], the psychological impact is very important, I’ve been an entrepreneur for 25 years, I know what this means”, Beciu said.
PSD’s Dragnea : No final solution was reached yet, the sides just agreed on a proposal
However, despite the consensus agreed on Thursday at negotiations on the Fiscal Code, Social Democratic Party (PSD) interim chairman Liviu Dragnea has a different opinion and says no final solution was reached yet.
“No final solution was reached yet, the sides just agreed on a proposal”, Dragnea told Agerpres correspondent on Saturday.
Liviu Dragnea met on Saturday in Sulina with the heads of the Social Democratic Youth organisations. This year too, the young Social-Democrats organized betwween August 20 – 23 in Sulina their traditional camp “A Clean Romania” Danube Delta National Trophy, engaging in sports and environmental clean-up activities.
“There isn’t a solution yet, we came to terms on a proposal. In the first place, I am pleased that the idea I launched yielded results, in the sense that we suggested to create a different political climate in Romania, not one riddled with scandal, tension and permanent contradictions, but a climate where at least the great themes of the society should be in a certain consensus. The proposal we agreed upon could become the final solution, but just as well, it could have more nuance added. The political leaders will meet to decide on that. As for me, I am pleased that our proposition turned to reality,” Dragnea said.