The new Fiscal Code draft was adopted by Parliament on Thursday and will be sent to President Klaus Iohannis for promulgation. The Chamber of Deputies, the decision-making body in the matter, on Thursday adopted the law with 279 votes in favour, 8 against and 5 abstentions, after the act had been adopted by the Senate on Tuesday.
The new Fiscal Code is therefore going to President Iohannis a second time for promulgation, with the amendments introduced according to the agreement of the leaders of parliamentary political parties.
The unanimously passed amendments provide for the introduction of a 20-percent Value-Added Tax (VAT) as from January 1, 2016 and for a further cut to 19 percent as from 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on fuels is postponed until January 1, 2017, but the special structure tax in agriculture investment projects will be repealed on January 1, 2016.As far as dividend taxation is concerned, a cut from 16 percent to 5 percent will also come into force on January 1, 2017.
The Budget Committee, at the proposal of Finance State Secretary Dan Manolescu, approved an amendment giving local councils the option of increasing the tax on buildings and land situated inside localities and that are not taken care of by up to 500%. The criteria for classifying such properties and not cared of as well as the enforcement procedure are to be adopted by decision of the local councils.
President Klaus Iohannis in July returned the Fiscal Code to Parliament, asking that it should be re-considered, with the argument that ‘the law-maker needs to promote a balanced and reasonable attitude, that should not generate malfunctions that would require frequent legislative corrections’, for which reason ‘the new Fiscal Code should not upheld policies that generate excessive taxation or relation’, according to the motivation of the president.
The PNL leader, Alina Gorghiu, and the leader of PSD, Liviu Dragnea, took the floor in Parliament, and so did the Minister of Finance, Eugen Teodorovici, on behalf of the Government, and Florentin Gust, for PSRO, who said the MPs of his party had voted against the draft law.
Eugen Teodorovici: ‘This Fiscal Code leads to over 4% economic growth in 2016’
The new Fiscal Code will bring, in 2016, an increase of consumption by 4.1%, an increase of investment by more than 6%, an average inflation rate of 0.5% and economic growth by over 4%’, Finance Minister Eugen Teodorovici said in the Chamber of Deputies on Thursday.
‘This Fiscal Code as it is today leads to an increase of consumption by 4.1%, an increase of investment by more than 6%, an average inflation rate of 0.5% and economic growth by over 4% in 2016, which means that the GDP of Romania will be approximately RON 743 bn next year’, the official noted.
‘Probably more could have been achieved, better could have been achieved. But the important thing is that today we have a shared project and the gain of any democracy is the ability to build together’, the minister of finance further said.
He stressed that the relaunch of economic growth, the growing purchasing power of the citizens, the fostering of the business environment, improvement of Romanian economy competitiveness and removal of discrimination generated by the current fiscal regime were objectives of national interest ‘for the promotion of which the Romanian Parliament has adopted this Fiscal Code today’.
Alina Gorghiu: ‘It is a moment of satisfaction for PNL’
The adoption of the Fiscal Code by Parliament represents a moment of satisfaction for PNL, the adopted text being the result of consultations initiated by the Liberals, PNL Co-president Alina Gorghiu said on Thursday.
‘It is a moment of satisfaction for PNL that this Fiscal Code has been adopted today. It is a Fiscal Code resulting from consultations initiated by PNL, which paid off. I called them unmatched consultations in the last 25 years. I would be happy to see that things will continue in the same direction. I also have a moment of sadness – the fact that, after bragging so much about the Fiscal Code parties gave so much attention to, the prime-minister didn’t even vote. Well, it is not a surprise, we have had another similar moment in Parliament, during the vote on doubling child benefits, another subject or pride for the prime-minister, for which he also didn’t vote’, Gorghiu said at the Palace of Parliament on Thursday, after the deputies had adopted the Fiscal Code.
She emphasised that PNL had voted for and believed in that Fiscal Code.
‘It is actually not a problem that the prime-minister does not believe in this Fiscal Code. We, as an opposition party, believe in it, we have voted for it and supported it. It keeps a balance between political responsibility and tax relation. And I am convinced that, as we see figures on economic performance, we will be able to adopt further fiscal relation measures’, said Alina Gorghiu.
The PNL official announced that the first Political Bureau meeting of her party would appoint people on technical consultation teams on the rest of the topics – the blanket wage law in the public system and the absorption of funds.
The request for the re-examination of the Fiscal Code President Klaus Iohannis had sent to Parliament was adopted by the plenary session of the Chamber of Deputies, as decision-making chamber, with 279 votes in favour,, eight opposed and five abstentions, on Thursday.
Liviu Dragnea: ‘We have agreed with Opposition on plan of measures to restore Parliament credibility’
The interim President of PSD, Liviu Dragnea, said on Thursday that he and PNL Co-president Alina Gorghiu had agreed to set up a working group the following week, whose job would be to produce a set of measures for a better operation of the Parliament, designed to improve the general image of the institution.
‘I was called on the phone by Alina Gorghiu who said she was backing that action, she said that PNL also had an almost final document on that and we agreed that, as we had done for the Fiscal Code, we would take common steps, the power and the opposition, and conclude a document, a plan of measures (…) to restore the credibility of the Parliament. We need that. I mean this institution needs to become credible again and can be made credible again’, Dragnea said at Parliament.
He added that, in no more than a month, the power and the opposition would present a plan for making the institution credible.
Dragnea explained that the plan was tackling the Regulation, the code of conduct of the MPs, the legislative circuit and the attitude of the member of Parliament.
‘We will discuss absolutely all aspects that have disturbed so far and that undermined the credibility of Parliament. It is unfair on the MPs, because almost all of them are reliable people’, Dragnea said.