Romanian Opp Social Democrats To Challenge Govt’s VAT Hike Decree With Ombudsman

Nastase said the Ombudsman can further notify the Constitutional Court on the matter.

Nastase highlighted the Parliament must somehow achieve consistency regarding the Government's austerity plan and correct those provisions which do not abide by the law, without changing the plan, which has already been endorsed by lawmakers following a confidence vote.

Social democrat leader Victor Ponta said Sunday the decision of the Government to raise taxes is illegal. He said that amendments to the Fiscal Code can only be made through laws and can be applied six months after they were adopted.

Opposition Liberal Party spokesman Mihai Voicu said the party will vote against hiking the VAT, adding liberals also consider challenging the decree's constitutionality.

The Government's austerity plan, which had been endorsed by the Parliament in a confidence vote, was challenged with the Constitutional Court, which ruled that some of its provisions were unconstitutional, namely those referring to pension reductions.

Following the Court's ruling, the Government announced it would resort to an alternative austerity plan and decided to increase VAT from 19% to 24%, in order to lower the budget deficit and keep a EUR20 billion IMF-led foreign loan package on track.

The proposal to hike VAT will be sent to the International Monetary Fund, whose board will probably hold a meeting Wednesday on whether to disburse the next installment of the EUR20 billion loan.

The Government will also insist that the Parliament amend the bills reducing public sector salaries and recalculating special pensions before the summer recess, so that the measures can be applied as of July 1.

If you liked this story, please follow MEDIAFAX.RO on FACEBOOK »

The content of mediafax.ro is for your information only. Republishing or using this content is forbidden without express consent of MEDIAFAX. For this consent, please ask for it by mail at vanzari@mediafax.ro.