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February 1, 2023
ECONOMYFINANCE&BANKING

FinMin Caciu: New governing program pursues more tangible goals regarding cut in labor taxation

Finance Minister Adrian Caciu said on Wednesday that the new governing program aims to set more tangible goals in terms of reducing labor taxation, noting that this must come in a package with several other measures.

“We will have a debate on this. The new governing program pursues more tangible goals regarding reducing labor taxation, because we are all aware that we have the highest labor taxation rate, and especially reach a balance between capital and labor taxation. (…) We propose a more concrete phasing, because everybody expects answers too, not just analyse reports and preparations,” Caciu said when asked about the recent statements of Social Democrat leader Marcel Ciolacu regarding the reduction of the labor tax and the increase of capital taxation.

The FinMin added that the balancing of the tax system in terms of labor and capital must be accompanied by employment programs for the active workforce and programs to stimulate job creation.

“If we ended up with an – in my opinion – excessive labor taxation, it’s because we had a limited number of workers and quite large financial needs to cover, therefore we must have more workers,” said the minister.

Caciu explained that just cutting labor taxation is not enough, because without offsetting this with higher capital revenues or higher employment rates, it would cause a revenue deficit to the state budget. “We need a whole plan,” the FinMin said, adding that the ruling coalition is working on the new governing program.

 

Starting with March there will be a more visible decrease in inflation, Government aims for inflation to have only one digit by the end of 2023

 

Minister of Finance Adrian Caciu said on Wednesday that starting with March there will be a more visible decrease in inflation, a gradual reduction, noting that the Government aims for inflation to have only one digit by the end of 2023.

“Inflation increases faster than it decreases and it is good to be careful when it starts to increase or to intervene more quickly because when it decreases, it takes longer to mitigate it. We have taken measures and the most important measure is the one with the regulation of energy prices for a period of two years. This will allow for the utility or administered price component to no longer be included in the prices of goods and services. On the other hand, we must also take care of the fuel component and the food production one, because we have to reduce the dependence on imports,” said the Minister of Finance in Parliament, when asked about the Government’s measures to reduce inflation.

He stated that from March, a more visible decrease in inflation will be noticed.

“From the perspective of inflation, I believe that starting with March we will have a more visible decrease in inflation, a gradual reduction. I saw that BNR [the National Bank of Romania] is optimistic about approaching a single-digit inflation, namely the third quarter. What we, the Government, have set ourselves as a goal, is for inflation to have a single digit, by the end of 2023. We must act permanently. I mean, you cannot say that what you have done is enough. You must act in total adaptation, because, for example, in February we see what the effect of the embargo on Russian oil is, we need to see if we have a shock in terms of the offer prices in the retail fuel delivery area. We will make a decision then if there are elements of intervention. This is the biggest enemy that we are fighting as a Government, namely inflation. This is not only in Romania,” said Adrian Caciu, according to Agerpres.

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