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Romanian PM: Govt Won’t Increase Flat Tax, VAT

The Romanian government is not planning to increase the flat tax or the value added tax to ensure the necessary funds for supporting the economy, but it will focus on improving the budget revenues collection from taxpayers, Prime Minister Calin Popescu Tariceanu said Monday.
Romanian PM: Govt Won’t Increase Flat Tax, VAT
17 nov. 2008, 20:50, English

"I don’t think this is a solution for the time being. The solutions should aim at increasing tax collection, from individuals and companies as well. I didn’t talk with anybody about increasing taxes, and I don’t want to induce fears that taxes might rise," Tariceanu said in a press conference.
 
On Monday, economic analysts said the next Romanian government would need to increase taxes to meet budgetary promises, particularly those regarding wages.
 
"After this electoral campaign, nobody can afford not to increase salaries, as promised, and as such, budget revenues should be increased. In the short term, these would be lifted by raising taxes," Lucian Anghel, the deputy president of Romania’s Financial-Banking Analysts Association, said Monday.
 
Most of the analysts said the current electoral promises exceeds the budget possibilities, and the only viable short-term solution is to raise taxes, and especially value added tax, which currently stands at 19%.
 
"We don’t wish for higher taxes, but it will be necessary. The debate regarding the tax amendments should begin before the electoral campaign ends," Anghel said.
 
However, BRD-Groupe Societe Generale chief economist Florian Libocor said despite salary increases, the government should speed up efforts to improve its revenues collection.