EXCLUSIVE: Romanian Govt Cuts VAT Funds For Local Budgets

The Romanian Government will cut funds from VAT collections to be granted to local budgets and will halve the money allotted for infrastructure works and sport grounds, according to the final form of the country’s 2011 draft state budget, obtained by MEDIAFAX.

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Total VAT funds to be allotted next year to local budgets are set at 13.8 billion lei (EUR1=RON4.2912), compared to RON17 billion in 2010, according to the draft act.

Funds allotted for infrastructure works and development of sport grounds in rural areas will be reduced to RON440.3 million in 2011, from RON813.5 million this year.

The draft act reads the Government also reduced local education salary funds and social benefit funds to RON8.8 billion next year, from RON11.5 billion in 2010.

According to the 2011 draft budget, the value of loans employers who create new jobs may take out was also halved to RON10 million in 2011, from RON20.6 million in 2010.

Under the law, employers who create new jobs can be granted three-year loans from the unemployment budget. The total sum allotted to the project is set annually through the social security budget law.

The 2011 draft budget will be approved by the Government and will be forwarded to the Parliament.

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