Prime Minister Ilie Bolojan on Thursday said President Nicusor Dan had asked him, at the time of the Government’s installation, to do everything possible to avoid increasing taxes, however, he noted that there was a significant gap between this desire and the budget reality.

„At the installation of this Government, the President, quite rightly, asked me to do everything possible to avoid increasing taxes in general and to manage the deficit through spending cuts, delayed investments, or other measures. That is the reality. The problem is that between this wish – which we, as a Government, also shared, and I personally as well – and the reality of negotiations with the markets, the European Commission, and our budget situation, there was quite a significant difference. And you can imagine that this fiscal package we are proposing – which is to be evaluated to see whether it will indeed correct, at least temporarily for a year or two, Romania’s deficit – was the only solution to quickly generate revenue without directly reaching into people’s pockets, by raising some indirect taxes which, admittedly, will somewhat affect people, because any increase in product prices means that you’ll pay more,’ Bolojan said on Antena 3 private television broadcaster.

He said that part of the VAT increase will be reflected in the prices Romanians pay.

„But had we not done this, please believe me, it wouldn’t have been a proposal for 21%; just think back to a few years ago when it was 24%. And so, this was the only package and the only short-term option to clearly show that we are working on structural revenues that increase budget collections and have the least overall impact on the economy,” the Prime Minister explained.

The head of Government also emphasised that there are significant arrears in tax and duty collection, particularly regarding VAT, due to the legislation not being amended to prevent cascading insolvencies.

AGERPRES