In the context of the public announcement of a new package of fiscal measures, the Coalition for the Development of Romania recommends that the main sources for reducing the excessive budget deficit are the reduction of budget expenditures and the increase of the capacity to collect tax revenues.
“The imposition of fiscal measures, of the magnitude of those circulated, in such a short term and in the middle of the fiscal year, risks generating new imbalances at the level of the economy.
Fiscal adjustment measures through expenditure control, however unpopular they may be, must be implemented with priority and speed. The Romanian state is forced to limit waste and act responsibly in the administration of public money”, CDR argues.
The Coalition further says that “the restructuring of state companies, which continue to accumulate losses and debts, the professionalization and digitization of the administrative apparatus, the rapid revision of the wage law are measures that can reduce expenses and, consequently, contribute to balancing the budget. For the adjustment to be sustainable, the level of expenditure must be monitored and supported by strengthening the capacity to generate income and by a fair and realistic budget projection.”
In the Romanian businessmen’s view, Romania can no longer postpone the recovery of the huge gap in tax collection.
“We still have the biggest VAT gap in Europe – 35%. Each percentage point of VAT means 1.4 billion lei not collected from the state budget.
The successful implementation and within the agreed terms of public programs and projects is conditioned by the technical and operational capacity of the state authorities and institutions.
Thus, the significant and urgent increase of the administrative capacity, through the use of competent personnel or the contracting of technical assistance provided by specialized service providers, local or international, is necessary and a priority.
Last but not least, the regime of sponsorship and/or patronage expenses must not be changed, affecting a mechanism that has already proven its usefulness in society.”
The Coalition for the Development of Romania encourages the Government to carry out a rigorous analysis of public expenses and ways to reduce them, benefiting from independent technical assistance, in order to scale them to a bearable level, assumed with responsibility.
“The business community we represent believes it is vital that any change in public policy is made transparently, through real consultation with all stakeholders. The predictability of the fiscal framework is a precondition for the continuation of investment flows and implicitly economic growth.
We also express our openness and willingness to dialogue in this way in order to put together the foundations of a sustainable, clear, digital and predictable tax system,” the press release states.
“Unfortunately, the fiscal adjustment measures that the Government is proposing now are not motivated by the need to reset the fiscal burden on a sustainable basis, but by the need to cover the recently recognized excessive budget deficit through spontaneous and insufficiently substantiated measures. If these measures are not included in a macroeconomic strategy of substance over a longer time horizon, in correlation with a plan to limit budget waste and make public spending more efficient, next year, election year, we will find ourselves in the same situation and a new fiscal pressure will be felt mainly by the private sector,” said Florin Pogonaru, President of AOAR and Coordinator of the Coalition for the Development of Romania.