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Romania Won’t Raise Taxation, But Enlarge Tax Pool – Econ Min

Romania’s government won’t increase taxation, but will enlarge the tax base, as some economic sectors are currently untaxed, Economy Minister Adriean Videanu said Thursday.
Romania Won’t Raise Taxation, But Enlarge Tax Pool - Econ Min
27 mai 2010, 11:24, English

An increase of the value added tax rate coupled with a decrease in public sector wages would have sharply affected purchasing power, Videanu said.

„Moreover, any percentage point added to the VAT (rate) leads to a 0.7% increase in inflation, triggering thus a raise of the key rate, of lending costs and suffocating the Romanian economy,” the minister said.

Romania has promised to keep the budget deficit below 6.8% of the GDP this year, by drastically cutting public spending, in an attempt to avoid an increase of the major taxes, the VAT and the flat rate.

On the other hand, the Government announced several measures to enlarge the taxation pool, such as taxing bank interests, food vouchers and stock market gains.