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Romanian Unions Push For Differentiated VAT In Talks With IMF

Romanian union leader Bogdan Hossu, head of national union federation Cartel Alfa, said Tuesday after a meeting with International Monetary Fund experts that Romanian unions think the country’s tax policy is inadequate and would prefer differentiated taxation, especially for VAT.
Romanian Unions Push For Differentiated VAT In Talks With IMF
04 mai 2010, 12:35, English

„We have warned the IMF that the country’s tax policy is inadequate and we prefer differentiated taxation, especially in terms of the value added tax,” Hossu said.

He said Romania’s tax regime discriminates people with low incomes.

„It’s abnormal to pay the same VAT for bread as we do for luxury items,” Hossu said.

The union leader added he discussed public sector layoffs with the IMF and said what the Fund has demanded, namely a 0.7% cut in wage budgets and just a 0.3% cut in administrative expenses is abnormal.

Hossu added they also discussed the country’s pension and wage reform.

An IMF mission is in Bucharest between April 27 and May 7 for the fourth assessment of Romania’s progress under a EUR20 billion IMF-led loan agreement signed last spring. Following the mission, the IMF will decide whether to disburse a fifth installment of EUR850 million to the eastern European country.

So far, Romania received around EUR9.2 billion from the IMF.

Meanwhile, unions in public administration, education and farmers have planed ample protests in May over wages, pensions and planned job cuts in the country’s oversized public sector.