Parliamentary parties agreed on Thursday, following their talks on the Fiscal Code, on the gradual lowering of VAT. Thus, the tax will be lowered to 20 per cent on 1 January 2016 and to 19 per cent on 1 January 2017.
The talks were attended by PSD Interim President Liviu Dragnea, Lower Chamber Speaker Valeriu Zgonea, PSD group leader Marian Neacsu. The representatives of UNPR at the talks were Deputy Prime Minister Gabriel Oprea and Minister of the Relation with Parliament Eugen Nicolicea. The representatives of ALDE were party co-presidents Daniel Constantin and Calin Popescu Tariceanu. The opposition was represented by PNL co-president Alina Gorghiu and Vaile Blaga, while UDMR was represented by party president Kelemen Hunor.
The meeting took place against the backdrop in which the representatives of political parties held technical talks last week, attended by Finance Minister Eugen Teodorovici too, talks in which most of them agreed on a technical pact concerning a VAT of 20 per cent instead of 19 per cent and the elimination of the fuel excise.
Although the technical agreement should have stood at the basis of a decision on the request to re-examine the Fiscal Code during Parliament’s special session, PSD President Liviu Dragnea announced n Monday, after the ruling coalition’s first meeting this week, that the ruling coalition parties want the party presidents to have a political meeting focusing on the Romanian President’s request to re-examine the Fiscal Code, considering the technical talks not enough. Parliament’s special session was cancelled, the Fiscal Code set to be modified during the normal sitting that will start on September 1.
Liviu Dragnea, the interim president of the ruling Social Democratic Party (PSD), announced on Thursday, following discussions among leaders of parties represented in the Parliament, an agreement to keep unchanged the amendments to the Fiscal Code and to gradually implement certain measures.
According to Dragnea, the value-added tax will be cut to 20 per cent starting on 1 January 2016 and further to 19 per cent starting on 1 January 2017.
The special constructions tax on energy infrastructure will be scrapped starting on 1 January 2017, while the special construction tax on agricultural infrastructure will be scrapped in 2016, at Agriculture Minister Daniel Constantin’s request.
Moreover, it was agreed that the fuel excise will be eliminated on 1 January 2017, the taxes on dividends will be lowered to 5 per cent starting in 2017, and the budget deficit will be kept under 2 per cent of GDP, according to the results of the negotiations as presented by Dragnea.
Victor Ponta: “I am glad for the parliamentary parties’ agreement”
The Prime Minister welcomed on Thursday the parliamentary parties’ agreement on the Fiscal Code, stressing that its adoption in the shortest time possible would be good news both for the business environment and for the public.
“I welcome it and I am glad for the parliamentary parties’ agreement on the Fiscal Code! Adopting it as fast as possible would be the best news for the business environment, for investors and, above all, for our country’s ordinary citizens,” the Prime Minister wrote on his Facebook account.
Gabriel Oprea on VAT cuts: “You’ll have a pleasant surprise”
The meeting of the parliamentary parties’ leaders on the new Fiscal Code was “very good,” Deputy Prime Minister Gabriel Oprea, president of the National Union for Romania’s Progress (UNPR, a junior member of the ruling coalition) said on Thursday.
He added that the party leaders will harmonise their standpoints.
“The dialogue proved very constructive. You know very well, UNPR too has proposed a dialogue; there was the technical dialogue, now the dialogue at the parliamentary parties’ leaders’ level is under way and I believe it is constructive and this is something that will be seen. Things are heading toward harmonization, which after all is in Romania’s interest. My ruling coalition and opposition colleagues will come out and you’ll see that this meeting has been very important. A technical and a political gathering and things will be harmonized,” Oprea told reporters at the event.
Asked whether an agreement was reached on the VAT cuts, Oprea answered that that would be a pleasant surprise.
“You’ll have a pleasant surprise, since things turned out approximately as they did during the technical meeting. The parties’ leaders are adjusting their positions and you’ll see it was a very good meeting and a very good dialogue among all parliamentary parties, after all on a major issue for Romania,” Gabriel Oprea stressed.
Calin Popescu Tariceanu: “I am glad we managed to reach consensus”
Liberal Democartic Alliance (ALDE) Co-President Calin Popescu Tariceanu expressed his satisfaction with the fact that a political consensus on the Fiscal Code was reached.
“This Tax Code will be for Romania, the business community and Romanians, who will stand to benefit from it, and I am glad that we managed to promote an ultra-Liberal code for which I have been long campaigning; it will not be the gift of the ruling coalition or the gift of the opposition,” Tariceanu said.
He said he is happy with the political consensus they reached. “I am glad that we managed to reach consensus. This is the most important thing in terms of message that we can send to the business community because this way we provide guarantees for stability for the future Fiscal Code, stability that will surely outlive the elections. Predictability and stability of fiscal policies are essential to the business community and that is why the majority and the opposition reaching consensus was important,” added Tariceanu. He explained that cutting the Value-Added Tax (VAT) from 24 to 20 percent on 1 January 2016 could benefit all Romanians as their purchasing power will increase as prices for goods and services go down, and it will equally help the business community.
He added that as far as the Fiscal Code is concerned, a prudent attitude was adopted, which means that some of the already unveiled measures will come into force on 1 January 2017.
He added that the Senate will vote on the Fiscal Code early next week, after which it will submit it to the Lower Chamber for a debate, according to Agerpres.
Alina Gorghiu: “The whole discussion was under the auspices of prudence”
National Liberal party (PNL) Co-President Alina Gorghiu stated on Thursday, after the talks, that the dialogue took place under “the sign of prudence,” pointing out that she informed President Iohannis about the mandate with which PNL attended the talks and she is glad that an agreement was reached.
“We could say we’re witnessing a premiere today – perhaps it’s a rather big word, but certainly it’s an exercise of dialogue between the opposition and the ruling coalition, which me and [PNL] co-president Vasile Blaga could place in the category of politically responsible ideas. The whole discussion took place under the auspices of prudence. I am glad (…) we will be able to vote – hopefully in unanimity – a Fiscal Code that eases the tax burden,” she asserted.
She added that reducing the VAT while remaining within the budget deficit target was the most important issue in the agreement.
“The part we’re very glad about is that we agreed on the VAT cut and we will stay within the budget deficit target we discussed with our colleagues, and which they agreed with during last week’s technical meeting, and talks went in a very good direction. (…) We have analysed the possibility of directing the budget deficit agreed on following talks with all political decision-makers towards the investments part, because we need to re-launch investments in Romania. (…) There were also talks about the possibility of reducing the [tax] burden on labour, provided Romania’s economic growth is sustainable. It was an excellent dialogue. There are more important matters and directions Romania has to follow, and I think this beginning could mean that – irrespective of the political competition between us and the other parliamentary parties – we can have a dialogue that means consistent, sustainable measures for Romania,” Gorghiu pointed out.
Kelemen Hunor: “We have to be cautious”
UDMR President Kelemen Hunor stated that he agrees with the measures taken on the issue of the Fiscal Code, pointing out that cutting the VAT to 20 per cent next year, not to 19 per cent, is very important bearing in mind what is going on in China now.
“I agree that this was an absolutely necessary agreement, because irrespective of what happens next year before or after the elections, irrespective of who will govern, the parliamentary parties have a joint responsibility. That is why I am glad that in the end technical talks were accepted and we all take up the Fiscal Code, albeit with certain nuances. I hope that next week – Tuesday, Wednesday or Thursday, at the latest – the Lower Chamber will vote on the Code, which will then be published in the Official Gazette after promulgation,” Kelemen said Thursday after the party leaders’ meeting on the Fiscal Code.
He mentioned that UDMR was initially in favour of the Value-Added Tax (VAT) being cut from 24 to 19 percent, but after the technical talks it accepted phased cuts.