IMF’s Tolosa to Ponta Gov’t: Tax Code draft should be significantly revised

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International Monetary Fund (IMF) urges the Romanian government to adjust fiscal relaxation measures in the Tax Code draft.

“We believe that the government’s 2015 targets are within reach, but into next year, more needs to be done in order for the government to be able to reach its targets,” Guillermo Tolosa, the International Monetary Fund’s resident representative said on Thursday, informs, during Euromoney Conferences in Bucharest, and continued: “The gap is considerable, and the tax code in its current format will have to be scaled back significantly, because just compensating with measures on the expenditure side might not go far enough.”

The expected deficit for next year is around 3 percent.

The Washington-based lender and the European Union are waiting for Romania to present measures to cover the shortfall so they can allow the country’s precautionary accord to continue.

“For our program to continue, we’ll have to see further improvement in terms of reducing the gap between our projections and what the target is,” Tolosa said.

Romania’s precautionary loan of USD 4.5 billion went off track last year because of disagreements over a reduction to social contributions and delays in deregulating natural gas prices.

Tolosa told also that Romania must make more progress on restructuring unprofitable state-owned energy companies.

“We’ve spent a lot of time on the structural agenda, and we noticed some progress, but we still think that more tangible actions need to be undertaken in order for the state-owned companies to recover from a very, very difficult situation,” IMF official pointed out.

IMF and European Commission representatives expect some of the assumed targets to be achieved, and for this the Gov’t led by PM Victor Ponta must find solutions for some part of the problems, so the program can be evaluated before it expires.

The Government will continue talks with IMF and EC representatives over June 19 – 30 in Bucharest, and the Romanian authorities hope the current arrangement will successfully wrap up in September, Finance Minister Eugen Teodorovici said recently.


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