Finance Minister Adrian Caciu says that it is more important to act on the energy prices and bring them "into a reasonable area," than to apply cuts in the Value-Added Tax (VAT).
"Perhaps the most important thing to do is to act on prices. I know that this question comes up related to tax cuts, especially VAT; I know that there is also a political party that supports it. Last year, all of Europe cut taxes. All European countries widened deficits. When you cut taxes, it means lower revenues. Deficits widened, public debt increased, there are historic public debts, which in fact call into question the entire fiscal pact that was adopted in 2010 and the measures unsuccessful, because energy prices continued to rise. What interests us first and foremost is to put energy prices in a reasonable area, because there were days when we had the highest prices in Europe," Caciu said at the end of a government sitting on Thursday when asked why Romania cannot cut VAT on energy as many European countries have done, told Agerpres.
He tried to explain with a mathematical example why such a measure is not supported.
"And I'll give another simpler example, arithmetically, 19% of one hundred lei versus 5% of one hundred lei and you do the difference and you'll see that you pay more if we only reduce the VAT, but we didn't do anything with the base price," added Caciu.
He was also asked if the analysis requested by the prime minister for tax exempting pensions under 3,000 lei was completed.
"The analysis was not only for the non-taxation threshold, but for everything that means the possibility of overtaxing the so-called special pensions. The analysis is completed, and probably soon the coalition will consider it appropriate to discuss it, because the relevant milestone in the National Recovery and Resilience Plan (PNRR) is coming up," said the minister.
Regarding the stage of PNRR renegotiation, Caciu mentioned that things are at an advanced stage, but some issues still need to be clarified.
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