RSS
Parliament/PM Ciolacu: Gov't assumes responsibility on a package of measures to cut waste
The package of fiscal and budgetary measures that the Government assumes responsibility for aims to cut "budget waste" and to put an end to the way in which "the powerful and with a lot of money thought they were untouchable", prime minister Marcel Ciolacu said in the joint session of the Chamber of Deputies and the Senate for assuming the responsibility of the Government on the draft law on fiscal and budgetary measures.
"I tell you with all responsibility: as of today, it is over with the double standard! It is over with state privileges! It is over with exceptions upon exceptions in the private sector! And above all - it is over with the money easily made from tax evasion! Just like all Romanians, I too am tired of the hypocrisy. I'm tired of hearing that if you don't have privileges, if you're not a chief in a state institution, then you can't work anymore. Or that if you don't have state aid, subsidies or facilities tax, then you go bankrupt or you are allowed to break the law. I'm tired of seeing some people collect their salary month after month, without having any performance, while others have to work hard for that salary. I'm tired of seeing how some people can pay all their taxes, contributions and taxes correctly, and others scream like a snake that you can't be correct! We must all understand that, as it was until now, the Romanian state cannot go on! We can no longer lie to each other, we can no longer pretend that we do, we can no longer always ask (...) without giving anything in return! We must put the whole system on a fair and equitable basis for all those who work, no matter where they work - in the state or in the private sector!" Marcel Ciolacu said.
The prime minister emphasized that the package of measures was debated for a long time and represents the beginning of a wider reform.
"They are not a simple reaction to the current needs of the state. In the last years, we had a consistent public dialogue and we met with all those who had something to say on this topic. Today I take responsibility for a set of measures, but we are only at the beginning of a wider reform, which actually means a resettlement of the state on a much fairer and more equitable basis. It is a national effort of Romania from 2023, to have a stronger economy and live better in 2025 and in 2030 as well. It was a debate that we could no longer postpone. That is why we moved forward with a lot of courage, courage that - unfortunately! - has been lacking in recent years in terms of reforms. Because time has no patience with us. I don't want to see a new generation in debt, just because we lose these years without doing anything!" Ciolacu said.
He announced that in the coming weeks a process of simplifying the country's laws will be started.
"We know that Romanians want a more involved and efficient state, with better public services, supported by a dynamic economy. In the coming weeks, we will start a process of simplifying the country's laws, so that all the efforts made by working Romanians, by the private sector and by the Romanian state can be capitalized at the fair value and expectations of all Romanians. Balancing the fiscal system and better laws means getting closer to what we called, a few years ago, a country as outside. But these objectives cannot be achieved without organization, without simplification or without a stronger state budget, which would help all Romanians to get over the crises that we, as well as the other states in Europe and the rest of the world, are facing," Ciolacu stated.
Specifically, he said that the Government will introduce an additional tax on bank profits and will come up with a new approach for large companies, which will pay a tax of at least 1 percent of turnover.
"This government is not increasing the general VAT. This Government is keeping VAT on food and medicines at 9 percent, just as we are keeping the lowest VAT of 5 percent on firewood, energy and gas. In addition, how can you talk about austerity when one of the main measures is to increase the minimum wage by 10 percent, and in construction by 12.5 percent. Increasing the minimum wage for 2 million people from some people's point of view is austerity. We are introducing an additional tax on bank profits and, above all, we are coming up with a new approach for large companies, which will pay a tax of at least 1 percent of their turnover," Ciolacu told the joint plenary session of Parliament.
He added that this is a measure aimed at fairness, which he has been proposing for two years, since he was in the Opposition.
"Big companies should pay at least the minimum level of a Romanian company. (...) That is why I am telling you now: the proposed tax measures will not destroy anything. On the contrary, they will stimulate Romania's development. I repeat, just to be clear: ordinary people will not pay any extra taxes. Excessive profits, luxuries and vices will be overtaxed," he added.
The prime minister stressed that it is normal for those who have expensive properties, worth over 500,000 euros, yachts or expensive cars "to pay more".
He added that the Government will massively increase fines, confiscate on a large scale the proceeds of tax evasion and will tax by 70 percent all illicit wealth.
"We all want a strong health system that is accessible to all. We all want an education system that really educates our children. We all want social services where our parents and grandparents are properly cared for. But all this costs money. And they can't be built when Romania has a tax evasion of 10 percent of GDP. 160 billion RON. 32 billion euros. That's why we will massively increase fines and confiscate the proceeds of tax evasion. We'll tax everything that means illicit wealth at 70 percent. But the 70 percent tax on unjustified amounts is not the same as taxing wedding or christening money. No! The 70 percent tax will be levied on those who have not paid their taxes correctly, on those who have evaded taxes, on those who have stolen money away from health, pensions and education," Ciolacu said in the joint plenary session of Parliament.
He added that the economic model "based on privileges and tax facilities" that has been followed so far cannot continue.
"Romania can no longer afford facilities and privileges of 75 billion RON and tax evasion of 150 billion RON per year. Together, they represent 15 percent of GDP, exactly what we would need to reach the European average in terms of income. Today we have among the lowest taxes and levies in Europe, but we collect the least VAT. Practically, we don't collect more than a third! In terms of profit tax we collect only a quarter of what we should, and on income tax - only 80 percent. We don't collect taxes, instead we borrow endlessly, risking the blocking of money from the European Union. That's not going to get us anywhere. In recent years huge tax breaks have been given to companies and various categories of employees. Logically, as a result of economic growth, state revenues should have increased. However, revenue has stagnated. Moreover, Romania's budget today is based on taxes paid by employees, on their consumption and on public investments," he said.