Romania’s economic stimulus priorities under new president’s helm

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“We should not introduce taxes during the crisis” is an important point of the political program with which Klaus Johannis has won the votes of Romanians and became president. Another economic line is to support the business environment, the Romanian capital and the small&medium sized companies (SMEs).

During the election campaign, he said that the return of VAT value to pre-crisis level of 19 percent is also a ‘top priority’. “Perhaps the most unfortunate combination of fiscal and budget for Romania is given by the increased VAT rate and poor capacity to control and by tax administration,” Iohannis electoral program shows.

Also on taxation, Iohannis promised a state fair treatment to the taxpayer, who should not be ‘a fiscal target’. According to the new president, through the flat tax of 16 percent, Romania still enjoys tax competitiveness relative to most EU countries. “In Romania, wages are low, while labor costs are high. This is the paradox of the tax burden of an almost suffocating labor,” Iohannis’s electoral program reads.

He also promised state subsidies for all parents who take their children to kindergarten or crèche, and less austere policies regarding benefits for mothers.
“In the 25 years since the Revolution, the population decreased by over 3 million people and the the effects of this situation are already observable in a not distant future and will become increasingly obvious. If nothing changes in addressing this issue and for the functioning of the economy and public systems as a whole, the scenario is a pessimistic one, with Romania reaching at mid-century to 14 million, of which a quarter will be over 65 years,” new president said.

Not the least, as president of the country, Iohannis wants the next ten years all major highways in Romania axes to be completed.

It remains to be seen how many of these promises will materialize in his 5-year term.

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