At a plenary session today, the Chamber of Deputies is expected to discuss and cast a vote on a request from President Klaus Iohannis for the re-examination of the Fiscal Code.
The Chamber’s Committee on Budget and Finance on Wednesday approved the request for re-examination and the inclusion of amendments providing for the cut in the Value-Added Tax (VAT) from 24 percent to 20 percent on January 1, 2016 and to 19 percent on January 1, 2017.
At the same time, the repealing of a tax on special structures and additional excise duty on fuels is postponed until January 1, 2017, but the special structure tax in agriculture investment projects will be repealed on January 1, 2016.
State Secretary with the Finance Ministry Dan Manolescu told the debates inside the Budget Committee that a provision should be reintroduced to the Tax Code, as initially agreed, to allow for the possibility of local councils to increase by up to 500 percent taxes on unkempt land and buildings within city limits, as requested by local administrations.
The committee passed the amendment, 19 to 2.
The re-examination request cleared the Senate on Tuesday. The Chamber of Deputies is the decision-making chamber in this case.
Some Fiscal Code taxes could be lowered before 2017
The tax cuts postponed for 1 January 2017 by the new Fiscal Code could be implemented before that date if it is proven that they are sustainable, according to Premier Victor Ponta.
“20 per cent as we proposed, I am glad it remained 20 per cent (the VAT level – editor’s note), all the provisions as worked with the Finance Ministry and the Government. [In what concerns] those measures that were not taken out of the Code but postponed instead, as we gradually prove with data that they are sustainable we can implement them even before 1 January 2017. I am talking about capping the health insurance contribution to 5 salaries, I am talking about the tax on buildings, the tax on dividends,” Ponta said during the Government meeting.
PM Ponta praises fiscal activity, Revenue Service for collecting an extra EUR 250 M in August
On the other hand, the Head of Government considers that the measure to cut taxes while simultaneously having a strong Revenues Service is working, considering that in August there were supplementary budget revenues of EUR 250 M.
“The good news is that the carrot and stick method – the Americans put it like this, let it be clear, I’m calling it the incentive method, namely the lowering of taxes and a strong ANAF – is working. In August, as we know, [there are] an extra EUR 250 M in budget revenues, this means we categorically have the money needed for everything we took the commitment to do on the health, education, European fund financing and local development projects side. Let’s hope that you are also able to spend the money. Unfortunately, when it comes to tenders and current procedures we have money but do not spend them,” Ponta stated.