EC: Romania has made progress, but the deficit in VAT collection is among the highest in the EU

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The European Commission found that Romania has made progress in recent years in terms of the mix of taxes and ANAF reform, but still has tax collecting problems, particularly VAT, the scarcity of collecting in this case is among the highest in the European Union, said on Thursday Carmen Marcus, analyst of economic policies with the European Commission Representation in Romania.
“The EC assessment is that there has been progress in recent years in terms of the mix of taxes and the ongoing reform of ANAF, but revenue collecting remains low, there are still shortages in VAT collecting, some of the highest in the EU,” Carmen Marcus said during a conference on issues of tax compliance.
The EC recommends to achieve and to maintain the medium-term budgetary objective (MTO).
Romania is already meeting the MTO since 2014, thus tax revenues are a central element of the public budget in this context. On the other hand, the EC recommends Romania to implement the strategy of comprehensive tax compliance and to strengthen the control systems to combat undeclared work.
According to Carmen Marcus, after three loan agreements with the IMF, WB and the EC, both Romanian and foreign specialists say that Romania was never better in macroeconomic terms. “The budget deficit is 1.5% of GDP; public debt is below 40% of GDP, far away from the 60% target set at European level. And in this building, fiscal policy is the first level above the foundation, it needs to be strengthened when the macroeconomic machine is shaking, and is also the first tier that can harm the macroeconomic stability so hardly attained in these years, with a massive effort both from the government and from the population,” said the EC representative.

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