No new taxes in the 2025 Budget
The Romanian government gives assurances that the VAT will not increase.
Ştefan Stoica, 16.01.2025, 14:00
Delayed due to the formation of the government, the approval of the budget for 2025 is the number one priority. It’s not just any budget, but one carefully constructed, without the excessive expenses that were included in the previous one and that generated a worrying deficit, which rose to 9% of the GDP. Meeting on the topic of the budget, the Prime Minister Marcel Ciolacu and the finance minister, Tánczos Barna, concluded that Romania could no longer afford an increase in spending on goods and services. On the other hand, the deficit target of 7% this year, assumed in the discussions with the European Commission, cannot be reached without freezing the salary and pension fund and an additional pressure on the National Agency of Fiscal Administration (ANAF) for better VAT collection.
However, in the case of small and medium pensions, the executive will look for solutions to supplement them, Marcel Ciolacu promises. Tánczos Barna pleaded for a rigorous control of expenses, so that Romania should respect its commitments to its European partners and insisted that, in terms of income, only the achievable ones should be included.
Tánczos Barna: “The medium-term structural fiscal budgetary plan assumed by Romania provides for this year 7%, and for the next seven years it stipulates a progressive reduction of the budget deficit up to 3%. And this commitment should be respected not only now, what we build today, what we build for 2025 must also have an impact for the following years, so that on the investment side we should not reduce the amounts allocated for investments, we should constantly increase these amounts, and, on the other hand, we should not exaggerate on the side of unachievable incomes, to avoid a situation in which the difference has to be covered by loans”.
Against the background of the scenarios circulated in the press according to which the authorities will increase some taxes, the PM and the finance minister have given assurances that the Value Added Tax remains unchanged.
Marcel Ciolacu: “We are not increasing the VAT. Why don’t we increase the VAT? I represent the social democratic party. First, the effort would be transferred equally to all Romanians, regardless of income, effort meaning a decrease in the purchasing power. I am not doing this, and I am very glad that the minister says the same thing. At this moment, consumption will decrease and automatically, you will see, we will also have a decrease in inflation”.
The ordinance adopted by the new coalition government (PSD – PNL – UDMR) at the end of the year provides for the reduction of state expenditures, the elimination of some fiscal facilities, in the case of IT, constructions, and the agri-food industry, as well as the reorganization and merger of agencies within the General Secretariat of the Government. A similar approach will also target the executive’s own functioning apparatus, as Romania needs a structural reform, Marcel Ciolacu also said. (LS)
