Amending the Fiscal Code under debate
Amending the Fiscal Code by the Social-Democratic Party-ALDE ruling coalition in Bucharest continues to spark off disputes
Roxana Vasile, 07.11.2017, 13:17
The motion filed against Finance Minister, Ionut Misa on Monday was rejected by the Senate. Initiated by the National Liberal Party and backed by the People’s Movement Party and the Save Romania Union, all in opposition, the motion accused the fact that the implementation of the government programme with which the Social-Democratic Party had won the elections has already given rise to economic imbalance difficult to overcome and the consumption-based economic growth proves its shortcomings. Furthermore, the signatories to the motion denounced the fiscal chaos triggered by the Tudose Cabinet: the increase of structural spending on wages, the lowering of public investment and tax returns. Liberal senator Romulus Bulacu:
“Through our vote, we, MPs of the National Liberal Party, the People’s Movement Party and the Save Romania Party, call upon the Tudose Government to take measures to restore the budget deficit to its set parameters as soon as possible, to ensure the fiscal stability and predictability required by the business sector, to take steps in order to protect Romanian businesses and capital, cut labour force taxes, boost direct investment, reduce spending on wages and social welfare; we also demand the resignation of the finance minister.”
Sharply criticizing the fiscal amendments envisaged by the Social-Democrats, president Klaus Iohannis reiterated that the implementation of the new measures must be postponed and they should be drawn up after a thorough analysis. Largely criticized by company managers, unionists and part of civil society, the amendments are fiercely defended by the Government. The latter says that the package of fiscal measures can create the premises for a sustainable economic growth pace, Romania currently being one of the EU’s most dynamic economies.
The Draft Ordinance amending the Fiscal Code says that starting January 1st 2018, social security contributions will be paid by employees and no longer by employers, the income tax will go down from 16 to 10% and employers will pay a solidarity tax. The government session focusing on the adoption of the Ordinance has been put off twice so far. When it comes to a package of such important measures, urgency is not a key factor for the rulers. In exchange, those who oppose the amendments to the Fiscal Code say that the rulers want to procrastinate adopting the measures either because they are insufficiently substantiated or they step back fearing criticism. Criticism has also come from the mayor of Bucharest, Gabriela Firea, a member of the Social-Democratic Party, who is afraid that the fiscal amendments might trigger the decrease of funds for investment in local communities. (Translated by A.M. Palcu)
