President Klaus Iohannis says the country needs economic policies that are responsible, balanced and able to ensure macroeconomic stability.
Romanian President Klaus Iohannis has warned that prudence is needed when it comes to budget expenditure, in spite of the fact that Romania has seen record economic growth rates among the EU countries. Iohannis made these recommendations at a debate staged jointly with the Chamber of Commerce and Industry. President Iohannis has reminded of the fiscal proposals launched in the public space lately and has pointed out that predictability, stability and a business-friendly environment are needed. The trust between state and economy cannot be earned only in election years but more likely after the elections, through coherent economic policies, Iohannis has pointed out. In his opinion, developing the country’s infrastructure is very important, as in its absence, economic sectors are less effective.
Klaus Iohannis: “I have noticed, with concern, that unfortunately governments come and go but the infrastructure problems remain, in spite of the fact that there is enough money, both European and local. It may be opportune, for instance, that an important performance criterion for a government should be precisely the absorption of EU funds and the implementation of investment projects, and not necessarily the dispute over who rises salaries faster.”
The President’s statements come against the background of fiscal and salary measures announced by the leftist ruling coalition made up of the Social Democratic Party and the Alliance of Liberals and Democrats. The unitary pay bill, stipulating an important pay rise in the state employees’ salaries, was submitted to Parliament. The first category to benefit the rise have been mayors, deputy mayors and county council presidents and vice presidents, whose salaries have already been increased by 30%, from the local budgets.
On the other hand, the current 16% flat tax on individual income will be replaced by a 10% tax on global household income, as of next year. The new taxation would also involve tax deductions for a series of expenses such as those incurred for private healthcare services and education. Moreover, the current contributions to the heath and pensions systems, which are currently paid by employers, will be paid by employees, also starting next year.
The American Chamber of Commerce in Bucharest says that introducing a very complex taxation system should be avoided, as it might create difficulties for the citizens. Its representatives say that there are concerns regarding bureaucracy and the collection of revenues to the state budget. AmCham Romania is made up of over 400 international and local American companies with total investments of over 20 billion dollars.