Prime Minister Ilie Bolojan states that no further increases in taxes and duties are necessary and that tax collection, combating tax evasion and attracting European funds remain priorities.
His clarifications came in the context of the Romanian Constitutional Court’s decision on Wednesday to dismiss the Alliance for the Union of Romanian (AUR)’s challenge to the legislative act providing for an increase in local taxes.
„The decision regarding local taxes was made in the summer. Only the Constitutional Court’s rulings postponed the implementation of this fiscal package, which has today been declared constitutional. We no longer need to increase taxes and duties. What we must do next year – so that it becomes the final year of fiscal consolidation, after which, on the back of lower inflation, we can resume healthy growth based on production and investment – is to ensure the collection of the taxes that have been established, in order to combat tax evasion and ensure that those doing business in Romania pay their dues to the state budget, and to attract European funds so that we can continue to finance investment,” the prime minister said in a programme on private broadcaster B1 TV.
At the same time, he advocated maintaining budgetary discipline ‘as strict as possible’ and reducing expenditure.
Ilie Bolojan also emphasised the importance of borrowing at much lower interest rates.
„We will not be able to avoid borrowing, because the deficits are so large that you simply cannot correct negative accumulations of many years in one or two years. But it is one thing to pay interest which, in a single year, amounts to 12 billion euros, and quite another to reduce each billion in the negative balance. That means more money for investment, money for development, better public services. This is what we must do, and to do so we need to plan expenditure in such a way that, at the end of the year, it is clear that the plan has been respected, and not to start with a deficit, as we did this year with 7%, reaching 7.7% mid-year and now targeting 8.4% at year-end,” the prime minister said.
Ilie Bolojan added that the numerous exemptions enjoyed by „a great many” social categories were among the reasons why projected state budget revenues did not match actual collections. In this respect, he explained that exempting people with disabilities from property tax had led to a situation in which approximately 10% of Romania’s built-up area was tax-exempt. Bolojan noted that there are around 957,000 people with disabilities in Romania.
„These taxes will go directly to local authorities, and I believe that every citizen of Romania, wherever they live, must contribute through the taxes they pay to the public infrastructure that improves their lives. A paved road, a water network, sewage, a good school for their children. We can no longer transfer funds to local authorities at the level we have done over these past years. (…) And the administrative reform, as proposed, is meant to complement this measure,” he went on to say. AGERPRES
