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VAT and flat tax not to be modified, finance minister assures

The Agerpres' George Andrei reports: the 16% flat tax and the 24% VAT will not be modified in the coming period, and Romania's financial perspective for 2011 is good, said on January 18 Romanian Finance Minister Gheorghe Ialomitianu, who attended the Euromoney Central and Eastern European Forum, in Vienna.

The minister said that the Government has managed to implement structural reforms and to meet the conditions in the loan agreement signed with the International Monetary Fund (IMF).

'Romania has not had the possibility to create a wider fiscal space to take measures to help the business environment. We signed an agreement with the IMF, the European Commission and World Bank in 2009 and together with the three bodies we have implemented a series of reforms to reduce these structural deficits. I could mention the implementation of uniform pay law, pension law, we have approved the fiscal-budget responsibility law, which allows us to draw up multi-annual budgets by providing long-term stability for finances,' the finance minister said.

He gave assurances that Romania has met all the conditions agreed with IMF, including the budget deficit target. 'We are in the situation of finalizing the agreement with the IMF, by meeting all conditions, including reaching the budget deficit target for 2010, which was set at 6.8% of GDP and on December 31 we recorded a budget deficit of 6.58% of GDP,' the minister told a roundtable meeting on Romania.

Among the objectives for 2011 voiced by finance minister, as part of the new preventive agreement with the IMF, is the consolidation of fiscal reform as key measure in the reform programme.

'This year we will sign a new agreement with the IMF and the European Commission, of preventive type, so it will not be a new loan. The main objectives will be the continuation of reforms on fiscal consolidation, economic reforms, especially the restructuring of big state companies, the continuation of healthcare reforms and reducing arrears. The 2011 budget is based on 1.5% economic growth by managing to cut current expenditures and increasing expenditures related to investments and co-financing. Versus 2010, these expenditures stand at 35 billion lei,' Ialomitianu pointed out.

He recalled that the Government has approved a law on long-term investments, it has started a series of investments in infrastructure, in Romanian villages and these investments will have a multiplying effect by creating jobs and business opportunities for local communities.

'In the field of taxation we want to ensure fiscal stability, so the 16% level is maintained also in the coming period and the VAT will remain at 24%. In 2010 we were forced to increase this tax from 19 to 24% because we failed to adjust expenditures to a sustainable level, but the financial perspective in 2011 and the next period is good,' the finance minister said.

Attending the roundtable meeting were also the IMF's head for Romania, Jeffrey Franks, BCR's CEO Dominique Bruynselles, Raiffeisen Bank's CEO Steven van Groningen, Eximbank's CEO Ionut Costea, Bancpost's CEO Peter Weis, BRD's CEO Petre Bunescu and investors on the Romanian capital market.

Sursa: http://www.agerpres.ro

Tags: fiscal budget agreement reforms minister finance

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