Romanian Govt “Is Trying” Not To Hike Taxes – Fin Min

„As I have said, we are trying not to change taxes,” Vladescu said.

He added the government hasn’t proposed so far to the IMF mission an adjustment of the budget deficit target.

„We are working with the 5.9% of the GDP (figure),” Vladescu said.

The minister said Monday that one of the variants discussed with the IMF delegation present in Bucharest points to an economic contraction in 2010 as well, but a final forecast has yet to be decided.

The IMF announced, before the beginning of talks on the fourth review of the stand-by agreement, that Romania’s economic growth forecast for this year was revised from 1.3% to 0.8%.

Since the economic growth forecast could be reduced further, and the budget correction would be wider, there would be needed additional measures to reduce spending or to boost revenues, or a combined form of the two.

Liberal head Crin Antonescu said Monday the Government intends to eliminate the flat tax and introduce a 25% monthly tax on revenues higher than 4,000 lei (EUR1=RON4.1352), to increase the tax on profit to 25% and to double the value of local taxes.

An IMF delegation is in Bucharest between April 27 and May 7, for the fourth revision of the stand-by agreement concluded between Romania and the international financial institution. Following this revision, the IMF managing board will decide, in the second half of June, whether or not to disburse the fifth installment, worth EUR850 million.

Romania has concluded a two-year stand-by agreement with the IMF, for EUR12.95 billion, while the overall foreign financing package, cumulating funds from the IMF, the EU, and other international lenders, reaches a value of EUR19.95 billion.

Romania has already drawn in foreign loans worth some EUR11.5 billion.