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EXCLUSIVE: Romania Says Tax Cuts Not An Option Unless Economy Recovers

Romania agreed to limit changes to its taxation system over the next period to ensure fiscal stability and said potential tax cuts won’t be considered until the economy grows again, according to the country’s additional letter of intent to a EUR13 billion deal with the International Monetary Fund.
EXCLUSIVE: Romania Says Tax Cuts Not An Option Unless Economy Recovers
Oana Gavrila
17 nov. 2010, 14:51, English

„We will limit ad hoc modifications of the taxation system to ensure predictability and stability (…). If the economic growth creates enough room, we will consider a gradual reduction of taxes,” the government said in the letter, which was obtained by MEDIAFAX.

The government said several of the austerity measures agreed with the IMF at a review mission in June have been delayed by the parliament, but mentioned the adoption process should be completed by the time the 2011 budget is approved.

Romanian authorities also said the unified pension law should be adopted in parliament in November and will be promulgated by mid-December.

Romania and the IMF last year signed a EUR13 billion loan agreement, part of a larger EUR20 billion aid package that includes funds from the European Commission, the World Bank and other foreign lenders.

Late October, joint teams from the IMF and EU visited Romania to assess the country’s progress under the agreement and decide on whether to disburse new aid.