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The government will carry out two budget corrections this year, the first to be in September, according to sources from the Executive quoted by DC Business. According to them, the Ministry of Development, Public Works and Administration and the Ministry of Transport and Infrastructure would be the main beneficiaries of the rectification in September.
At the same time, the quoted sources specified that, in the discussions held with the president of the European Commission, Ursula von der Lyen, at the beginning of last week in Athens, where a meeting of the heads of state and government from South-Eastern Europe took place, Prime Minister Marcel Regarding the budget deficit, Ciolacu pointed out that Romania had a series of additional expenses in the context of the war in Ukraine and that 2023 is the first year when defense expenses amount to 2.5% of GDP, according to the commitments assumed within NATO.
Discussions regarding the budget deficit target should continue in Brussels, most likely on September 1, in the context of an official visit that Prime Minister Marcel Ciolacu will make to meet with European Commission officials.
These days, the ministers of Labour, Finance and Investments and European Projects will be in Brussels on working visits. Today, the Minister of Labour, Simona Bucura-Oprescu is going to discuss with the officials of the European Commission on the subject of the project on special pensions, but also on the reform of the pension system as a whole, and tomorrow the Minister of Finance, Marcel Boloş, will discuss in Brussels the draft ordinances emergency regarding administrative reform and fiscal measures.
According to the latest World Bank report, public wages and pensions are the main structural problems that have generated the high budget deficit, the other causes being the overlapping crises generated by the Covid-19 pandemic and the illegal invasion of Ukraine by the Russian Federation.
"The government is committed to promoting the reform on both sides of the budget: revenues and expenses. To improve revenue collection, a modernization of the Fiscal Administration Agency (ANAF) was launched, although the results will only become visible in the medium term. Eliminating or reducing tax exemptions (for example, for the self-employed or for certain categories of employees) would significantly increase budget revenues. On the expenditure side, the recently launched public wage and public pension reforms, if completed, have the potential to lead to a more sustainable and fiscally equitable path. Therefore, there is a need to adopt fiscal consolidation measures in the medium term, such as improving fiscal administration, as well as payment processes and systems. The relevant measures include the streamlining of budget processes, the development of a digitized Integrated Financial Management Information System (IFMIS), increasing the efficiency and effectiveness of revenue collection and tax administration, mandating the use of electronic invoices to increase VAT collection and combating tax evasion," say the Bank's experts World.
The quoted document also shows that "the strategies that allowed past progress in reducing poverty are unsustainable from a structural point of view" and states that in the period 2014-2019 the reduction of poverty was the result of the increase in income from work (the minimum wage) and from pensions, as a result of fiscal reforms. The measures taken "exercise increasing pressure on the public budget and pension income, aggravating its imbalances", claim the experts of the World Bank, who state that people with considerable wealth also benefited from the tax exemption. "Most of the tax breaks have accrued to households at the top of the income distribution," the report said.
On Wednesday, August 30, Adrian Câciu, the Minister of European Investments and Projects, will debate with Commission officials the renegotiation of the PNRR regarding several aspects, including the introduction of projects that will be financed from the EU RePower Mechanism.
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