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MEP Stolojan about the broken down payment of VAT: it is complicated for the Romanian economy

The liberal (PNL)  MEP Theodor Stolojan considers that the broken down payment of VAT represents ‘ a complicated matter’ for the Romanian economy.

‘Broken down payment of the VAT is a complicated matter for the Romanian economy, It will produce much trouble for the small entreprises. It seems that the PSD has people who remember  the way they worked during the socialist years. During those times, every entreprise when they got the payments from the products they sold or their services they broke it down into two accounts: one where they had the equivalent of the costs and the other where they had the equivalent of the socialist accumulations where they had the tax for goods circulation, etc. Broken down VAT is not an invention, it functioned during the socialist years. I guess that in PSD somebody remembered this instrument and they try to apply it to the market economy’ Stolojan said, in an interview with RFI.

As regards a drop in the  tax for income from 16% to 10% the PNL MEP explained that this will generate ‘ a lack of resources’ which the  Tudose government will  have to fill.

‘It is a measure which will  have a clear effect  on the country budget. The Tudose government will have to  show  transparently  with what they will cover this lack of resources. The standard answers will be that the reduction of the tax will generate more economic activity, more work places, etc.’ Theodor Stolojan explained.

As regards the social contributions, which, starting with 2018 will be due by the employee, Stolojan considers that, if applied correctly, this measure will not create  any problem.

‘There are two conditions which must be observed, what the employee receives, the net salary, not be  changed and what the employer gets, the cost of the work force, again not to be changed. So, we are discussing about two social forces – employers’ associations and trade unions – which will act in this direction in order to make the governme nt  observe the two conditions (…). This means a rescheduling of the percentage quota within the cost of the work force. I don’t see any difficulty in making this possible’ he said.

The minister of public  finances announced on Friday that the broken down payment of VAT  is postponed with three months, until  1 January 2018, but the people who opt for this system between October and December 2017 could benefit from certain facilities.