The government will be, to a certain extent, one of sacrifice, because „there are some measures coming that will annoy everyone,” said the chair of the Hungarian Democratic Union of Romania (UDMR) Kelemen Hunor on Sunday, adding that the government’s program does not mention an increase in VAT.
„I would like to believe that in the coming years this coalition, with all its disputes (…) will find a balance,” Kelemen Hunor told private broadcaster Digi 24.
He specified that the government program does not mention how the Value Added Tax should be increased, but that the issue is related to how to increase revenues, as stipulated in the agreement with the Commission, given that Romania currently has a huge deficit and there is a Commission procedure against states that have exceeded a certain deficit percentage.
„(…) The problem how to increase revenues and reduce expenditures remains. From this point of view, there have been a lot of discussions. VAT is the simplest method, because you can introduce it relatively quickly and the money comes in, but you reduce consumption and increase inflation. If you don’t do it in moderation, then you may not have the revenues you thought you would when you did your calculations, because if consumption is reduced and the Romanian economy is very, very consumption-based, then revenues also fall. On the other hand, if you cut investments, you don’t help the economy, then you cool the economy and you will go into recession and then you won’t collect anything and the economy won’t work, things will get complicated. That’s why it has to be balanced, it has to be thought through very, very carefully,” the UDMR leader pointed out.
He also announced that there will be two VAT rates, 9% and 19%. „Everything that is at 19% will remain at 19%, this will be arranged, but here, of course, the new Minister of Finance will initiate and the prime minister will assume, and then we will all see exactly what will happen. I have requested that we remain at the lower rate, that we do not reach 19%, because the cultural sector needs support if we do not want to destroy it completely,” added the UDMR leader.
AGERPRES
