Ponta: CAS reduction won’t lead to new taxes being introduced

Prime-minister Victor Ponta said on Wednesday that cutting back the social security tax (CAS) won’t lead to new taxes being introduced in order to compensate for the deficit. The PM argued that the European Commission asked the Government to assure sustainability of the measure and fall in withing the deficit limits established through the Fiscal Treaty.

“IMF and the European Commission – less so in IMF’s case – have asked us to respect the Fiscal Treaty in terms of deficit limits. How we do it, that’s what we’re discussing during this time”, Ponta added.

PDL deputy Andreea Paul said on Tuesday that the International Monetary Fund (IMF) mission to Romania, headed by Andrea Schaechter, asked the Government to come up with compensatory measures to be applied together with the reduction of the social security tax CAS. The Government hasn’t prepared any measures, she also said.

She also said that the IMF representatives and those from the World Bank and the European Commission, didn’t give any guarantee that the promised CAS cut will happen starting July 1, 2014 like the Government promised.

Regarding the budgetary deficit for 2014, the PM said on Wednesday it will increase by RON 700 million, representing expenses for the Ministry of Defense.

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“We’re talking about 0.2 percent GDP for Defense, yes, the Budget Minister negotiated the sum with the European Commission”, the PM said.

This in turn means the target deficit will have to be increased.

“Yes, it will be increase, because we the European Commission allowed us and other countries in the region this possibility to add to the deficit Defense expenses and I believe it is a good thing because we needed it”, the government official explained.