IMF: Romania Should Keep Tax System Stable For Couple Of Years

The International Monetary Fund recommended Romania maintained its tax system broadly unchanged for the next two years to ensure stability in the business and consumption sectors, IMF mission chief Jeffrey Franks said Monday.

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Franks said constant changes in the taxation system are unproductive and the IMF "strongly recommends" Romania keeps the system stable, particularly following a series of harsh measures adopted recently.

"We want stability of the tax system and in the expenditure sector," he added.

Early July, Romania introduced a five percentage point increase in the value added tax level to 24%, in a move aimed at boosting revenue and cutting the budget deficit.

Two weeks ago, however, the lawmakers adopted "by mistake" a bill cutting to 5% from 24% the VAT level for basic food items, as well as an amendment to the Tax Code that exempts small pensions from a 16% income tax.

According to official statements, the lawmakers believed they were in fact rejecting the tax cuts.

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