International Monetary Fund experts recommend to the Bucharest authorities the possible progressive taxation of personal income, the increase of VAT revenues, including by taxing more products at the standard rate of 19 percent and the introduction of a carbon tax in transport and construction.
An International Monetary Fund mission, led by Jan Kees Martijn, was in Bucharest this week to analyse recent economic and financial developments and review macroeconomic forecasts, agerpres reports.
In the conclusions published on Thursday at the end of the visit, the experts forecast fiscal deficits of over 6 percent of GDP in the coming years, given the costs of the new pension law and stress that, under these conditions, new measures are needed to reduce deficits to sustainable levels.
According to the source, while efforts to curb non-pension related spending and improve the efficiency of government and tax administration are welcome, their potential contribution to fiscal adjustment is limited, especially in the short term.
"Romania's tax revenues are well below the level of comparable countries and too low to support public services at EU standards. Consequently, there is no realistic way forward without substantial fiscal policy reform," IMF experts argue.
In this context, the IMF recommends further elimination of tax exemptions, including lowering the threshold for micro-enterprises, increasing property taxes and pension reform.
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