The Romanian Government will not increase taxation, but it will raise the tax base, Economy minister Adriean Videanu declared on Thursday, quoted by Romanian news agency Mediafax. An increase in the VAT could mean a 0.7% inflation advance, he added.
"The increase in the VAT from 19% to 24%, associated with the drop in salaries in the public sector, would have led straight to the drop in the consumption supply by approximately 25%. Plus, any VAT increase by 1% leads to a 0.7% increase in the inflation rate and, implicitly, to the increase of the key-interest, of the crediting cost and we would have therefore suffocated the Romanian economy", Videanu declared.
He mentioned that the preservation the current level of taxation will be achieved by enlarging the tax base.
"It does not seem fair to me that there are sectors without taxation. Can Romania still afford to grant subventions for the barren agricultural land?" Videanu stressed.