Băsescu: "We won"t negotiate with the IMF on increasing the VAT and the single tax rate"

• The President considers maintaining the lump sum tax would be appropriate

In an interview with a TV station given yesterday, President Traian Băsescu said that he has notified the officials of the IMF that there are two things that aren"t negotiable: the single tax rate and the VAT.

Traian Băsescu made the following statement, according to Agerpress: "When beginning the negotiations (ed. note: with the IMF) I said that there were two non-negotiable things: the single tax rate and the VAT. (...) A journalist has been eavesdropping on a conversation I had with American and German businesspeople and that"s where he got the idea that the , which is not true". The president said that there is major pressure in the talks with the IMF to increase state budget revenues and lower the deficit.

According to him, his reply was that the 19% VAT and the unified 16% tax rate are "two cornerstones", which the Romanian authorities did not want to touch "when signing the agreement with the IMF".

The president said that if he were to choose between raising the VAT and raising the unified single rate, he would choose the first one.

Traian Băsescu said: "The IMF will most likely pressure us to raise something. We told them that we won"t touch the single tax rate. We will fight for keeping the VAT as it is. If I were to choose what to change, I"d agree to raise the VAT. What I can tell you now is that my stance on the IMF remains unchanged: we"re not raising any taxes, because it is my conviction that it would be pointless, the only outcome would be to cause an increase in tax evasion".

As to the lump sum tax for companies, Traian Băsescu said that it was "a good idea" and that it needs to be "maintained".

Traian Băsescu added that in the county of Dolj alone, the application of the lump sum tax led to the deregistration of 3,000 companies of which 2,000 were inactive. Băsescu said that there are companies that don"t pay any taxes and disappear after importing a few truckloads of apples from Poland.

In his opinion, companies that couldn"t pay the lump sum tax weren"t ready for a competitive market.