Romania’s government passes second budget revision

The budget revision approved by the government on Wednesday, which was vetted by international lenders, is “not pessimistic, but realistic,” said Daniel Chitoiu, finance minister.

The minister stated that budget revenues, as their share in GDP, are 0.2 percent less than the same period of last year.  He added the tax collection targets for October were set to be exceeded, pinning his hopes on a similar trend by year end.

“I hope that in the fourth quarter to meet our budgetary targets and event exceed them,” said Chitoiu.

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By yearned, the government aims to collect more taxes from farmers and from utilities, which have to pay more in taxes as Romania has kicked off the liberalization of gas prices for households and companies.

In the year to date, only 25 to 30 percent of total estimated revenues of RON 230 million (EUR 52 million) have been collected from utilities in the year to date, under the new tax

Chitoiu said the tax evasion is set to shrink, following the reorganization of the tax authority ANAF, and the roll out of a new tax antifraud department in the second half of November.

According to Chitoiu, any decision regarding the reduction of social security contributions or the decrease of VAT for certain food products could be made starting next week. The government aims to conclude negotiations with the IMF on the draft budget for next year.

Under the second budget revisions, revenues have been slashed by RON 2.9 billion (EUR 654 million), while expenses of the state budget were shrunk by RON 1.6 billion (EUR 360 million).

The government reduced the co-financing for EU funded projects developed by the Ministries of Labor, Regional Development, Environment, Transport and Economy. More funds were allotted to the Ministries of Justice, Internal Affairs and Foreign Affairs, as well as the Chamber of Deputies and the Food Safety Authority.

The budget deficit will reach 2.5 percent of GDP this year on cash from 2.3 percent, which was the previous estimate, according to delegate-minister for budget Liviu Voinea. The economic growth forecast has been revised upwards to 2.2 percent for 2013, from 1.9 percent in July, and 1.6 percent at the start of this year.

Ovidiu Posirca