Prima pagină » English » Romanian President Opposes Tax Hikes, Including VAT

Romanian President Opposes Tax Hikes, Including VAT

Romanian President Traian Basescu on Wednesday said he opposes any tax hikes in times of crisis, as the measure would only increase tax evasion, dismissing recent media reports about him favoring a higher level of the value added tax to boost revenues to the state budget.
Romanian President Opposes Tax Hikes, Including VAT
28 oct. 2009, 15:42, English

„At the start of the negotiations (with the International Monetary Fund – e.n.), I’ve said that two issues are non-negotiable: the flat tax and the VAT (…). The Fund will probably keep pressuring us to increase (one of the taxes). I’ve said that the flat tax is not to be touched under any circumstances and we will fight for the VAT as well,” Basescu said in a TV show on Kanal D channel.

Confronted with a choice, however, Basescu said he would rather have the VAT increased.

He mentioned an „eavesdropping journalist” had misinterpreted one of his previous statements on the issue, adding he is against any duty hikes.

„My position regarding the Fund remains the same, namely not to increase any type of taxes, because I believe that higher taxes in times of crisis are useless, as they lead to increased evasion,” Basescu said.

Early October, Basescu was quoted by Ziarul Financiar paper as saying that the government may increase the VAT level as of next year to comply with the IMF terms, adding that he would rather have a higher VAT than a higher flat tax.

Basescu reportedly said the VAT could be increased by up to three percentage points to 22%, based on the economic conditions.

Romania, which secured a EUR20 billion IMF-led financial package back in the spring, committed to a series of fiscal and economic measures meant to reduce spending and lower the budget deficit to below 6% of the GDP in 2010.