Social Democratic Party (PSD) President Liviu Dragnea has asked Prime Minister Dacian Ciolos, through an open letter, to “urgently” present in Parliament a report on “the country’s real economic situation,” expressing his concern about “the alarming signals” concerning the Government’s intentions.
“I am asking you to urgently present, before the Chambers of Parliament convened in a joint meeting, a report on the country’s real economic situation, including the tax collection level, the budget deficit, the current account deficit, the trade deficit, and the estimated economic growth that forms the basis of the budget execution,” Dragnea’s open letter reads.
At the same time, the PSD President is asking the Prime Minister to adopt a clear position on the “Government’s real intentions,” arguing that “the contradictory information that directly or indirectly comes from the members of Government sparks confusion and concern among investors, employees and all the other citizens.”
Liviu Dragnea justifies his call by pointing to the emergence “in the public space” of multiple “alarming signals concerning the Government’s intention to adopt a series of worrisome measures, such as putting a ceiling on child benefits, hiking taxes for those engaged in independent activities or radically changing the Fiscal Code.”
He informed the Premier that he “categorically” opposes these measures, considering them to be “harmful.”
The Finance Ministry announced on Wednesday, in reaction to press reports on a package of draft amendments to the Fiscal Code, that Minister Anca Dragu did not sign off a draft that would include tax hikes or the hiking of mandatory social security contributions.
According to a draft emergency ordinance on modifying the Fiscal Code, draft published by the press on Tuesday, the Finance Ministry is considering substantially modifying almost 200 of the 500 articles of the Fiscal Code that came into force through Law no.227/8 September 2015. According to the proposal, the overall social security contribution would drop to 21.7 percent of the gross salary, would be fully payable by the employee, and the employer would no longer have to pay any kind of social security contribution.
Secretary of state Gabriel Biris claimed the authorship of the draft, pointing out however that the draft was allegedly part of an internal debate “that does not mean that the employee or the employer has to pay any extra penny,” and which instead sought to put a ceiling on the basis on which all social security contributions are calculated.
CDR welcomes start of constructive dialogue on simplifying fiscal system
The Coalition for Romania’s Development (CDR) announced in a press release on Thursday that it continues to support, in all of its overtures with the Finance Ministry, the elimination of red tape, the modernisation and the simplification of the Romanian fiscal system, welcoming in this context the start of a constructive dialogue on the introduction of certain measures included in the aforementioned draft. CDR expressed its intention to closely analyse the stipulations of the draft that will be put up for public consultation and to take part in the dialogue on the technical fiscal implications of the amendments sought.
“CDR considers that the announced proposals represent a new basis for the start of a real dialogue on the simplification of the social security contributions regimen, in the sense of unifying the social security and healthcare contributions owed by the employer and the employee, as well as the real capping of these contributions, the aspects that have to do with the language of the stipulations and with the legislative technique being left to be analysed and corrected within the public consultation process.”
“Likewise, the CDR welcomes the intention to clarify and simplify risk assessment procedures when it comes to VAT registering, through the introduction of the notion of “suspension of VAT code” for a 90-day period in case it is determined that a taxpayer presents high fiscal risk following the risk assessment carried out by the Tax Authority, with this period of suspension being used in order to verify whether the taxpayer presents a high fiscal risk or not. Limiting the assessment to taxpayers with high fiscal risk, as well as eliminating the concept that erroneously formed the basis for the need to file the D088 form, namely the concept concerning the assessment of the intent and capacity to carry out economic operations, can eliminate many of the problems that have appeared in recent months,” the communique reads.
At the same time, CDR reiterates that fiscal legislation should be modified in a transparent manner and by taking into account the principle of fiscal predictability, a principle which the entire business sector stresses, being of the opinion that a public consultation on the draft amendments to the Fiscal Code should take place over an interval 6 months prior to their implementation and should lead to amendments that are to the benefit of the entire business sector, in the sense of modernising, simplifying and reducing fiscal bureaucracy.
Gov’t Spokesman: PM Ciolos to go before Parliament; PSD’s leader’s initiative, very good
Prime Minister Dacian Ciolos will go before Parliament to present Romania’s economic situation, Government Spokesman Liviu Iolu announced on Thursday.
“The Social Democratic Party’s (PSD) Chairman’s initiative is very good because it gives the possibility to Prime Minister Dacian Ciolos to go before Parliament and show that this year’s economic data are very good. There is a 6 percent economic growth in the second quarter, there are over the target collections. (…) It is also a good opportunity to draw the attention in Parliament on the legislative initiatives which put pressure on the budget and, consequently, on the budget deficit established by Parliament. The Prime Minister will go before Parliament same as he has always done and is only expecting the date according to the Parliament procedures,” Iolu pointed out in a briefing at the Victoria Palace.
He added that Prime Minister Dacian Ciolos and PSD Chairman Liviu Dragnea haven’t talked on the phone on this matter, but the Government’s answer comes following the open letter the Social Democrat leader sent on Thursday.
Gabriel Biris has resigned from the position of Secretary of State in the Ministry of Finance after the scandal of the amendments to the Fiscal Code
Gabriel Biris has resigned on Thursday from the position of Secretary of State and coordinator of the Tax Legislation Department in the Ministry of Finance, announced the Government spokesman, Liviu Iolu. Gabriel Biris’s resignation is related to the scandal of the amendment of the Fiscal Code, after a draft ordinance not assumed by the Minister of Finance was revealed to the press. “He realized that he exceeded his mandate granted by the PM regarding the debureaucratisation of the tax system and he filed his resignation to the PM Chancellery”, stated Liviu Iolu.
Liviu Iolu: Unfortunately, Biris has launched in the public space measures not assumed by this Government
“This morning, Mr. Biris’s resignation reached the PM Dacian Ciolos and PM has accepted this resignation”, announced Liviu Iolu, adding that “Unfortunately, Gabriel Biris has exceeded this mandate and released to the public space measures not assumed by this Government”.
Liviu Iolu also stated that Biris resigned without being asked to do it.
Gabriel Biris, in charge with the tax matters into the Ministry of Finance, assumed on Wednesday the draft amendment of the Fiscal Code, published on Profit.ro, which has inflamed the political scene and the business environment, stating that the provisions of the project would be beneficial and that they are in the spirit of the tax simplification.
However, Biris asserted that it is regrettable that a draft still unfinished was revealed to the press.
He made his statements in an interview held in Poland, within the margin of the economic forum from Krynica, given to the journalist Dan Carbunaru from Calea Europeana (The European Way), who posted the discussion with the Secretary of State on his Facebook account.
“Somehow, it’s a regrettable incident that a draft on which the discussions weren’t finished was revealed like this, by sources, and people who didn’t understand very well what that draft provides started to criticize it. That draft is about simplification. (…) For the first time in our legislation, we were suggesting a ceiling of the calculation base for the social contributions, effectively, applied to the amount of all incomes”, Biris said.
He defended the proposal to decrease to zero the social contributions owed by the employer and to increase, in turn, the level of the contributions owed by the employee.
“Do you know any company that was sick and went to the doctor? Do you know any company that will receive pension when retiring? We must understand one thing: health and social contributions don’t belong to the employer, they belong to the employee”, Biris stated.
He asserted that the draft wouldn’t do anything else but resetting the contributory system on normal bases, according to Ziare.com.
“Thanks to a well grown hypocrisy over the time, we divided contributions between the employee – lower contributions-, and the employer – higher contributions. That was only to hide a fact, namely how high the cost of labor is in Romania”, said Biris.