Romania’s budget has reached a critical state, warn more and more economists. The barrage of price increases on the conveyor belt, the increase in fees and taxes most faithfully reflects this, according to specialists.
Radu Nechita, university professor at “Babeș-Bolyai”, refers to the change in the property tax, ordered by the PSD+PNL alliance.
“When governments raise or announce tax increases in an election year, it can mean either an overwhelming sense of responsibility combined with absolute sincerity in the face of a budget impasse, or the politicians in question hoping the measure will bring them more votes than those lost – for example in the case of taxes ‘on the rich’, ‘on multinationals’, ‘on excess profits’, ‘on vices’, etc.).
The first variant is the preferred formulation of the communication departments of parties and governments, being believed only by those who believe in the responsibility and sincerity of politicians. The second option is the everyday reality of politicians’ electoral consultants.
Those who are skeptical about the sincerity and accountability of the political class will interpret the announced tax increases as a symptom of desperation in the face of a much worse budget situation than anticipated and the solution of which can no longer be postponed until after the election,” he commented Radu Nechita, for Newspapers.com.
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From 2025, property taxes will be recalculated, so they will no longer be determined according to the area, but according to the “value of the property” in question.
“Given that the percentage of homeowners in our country is one of the highest in the world, raising property taxes is a risky bet in terms of votes, even if the measure will be ‘packaged’ as fair or against ‘those with villas’ of millions of euros'”, the university professor also declared.
Romania’s budget, in a critical situation. The burden is still on the shoulders of the citizens
The “Ciolacu-Ciucă” team is panicked, the university professor suggests. Most likely, the increases in taxes and fees already applied, “may have led to a slowdown in economic activity.”
“My interpretation of the information I have is that the discussion of this measure is a symptom of the severity of the budget situation. Just as serious and reasonable economists have warned, public spending has continued and continues to grow relentlessly, faster than the wealth produced in the country grows, and tax increases have not brought the collection politicians dreamed of, or worse, may have led to the slowdown of economic activity, to company closures, to the partial transition to the underground economy and perhaps even to the reduction of budget receipts”, the economist also pointed out.
Power, held accountable by the opposition
After four years since the last elections, drawing a line, Romanians have become impoverished, warns Dan Tănasă, from AUR.
“(…) The economic context not only did not change, but worsened. Romanians’ salaries have not doubled, pensions have not tripled, incomes are practically the same. Instead, for two years, fees, taxes, the price of services, everything have increased.
How did all this translate into the daily life of Romanians? Through an increase in the fiscal burden, through an impoverishment of Romanian families. Romanians are poorer today than two years ago”, declared Dan Tănăsă, for Newspapers.com.
“Triple Taxes for Property Owners”
In the opinion of the deputy of the opposition party, 2025 will be an extremely difficult year for Romanians, similar to the period 15 years ago, marked by extreme poverty.
“What will happen in 2025 is exactly the phenomenon we have been calling attention to for the past few weeks: the post-election year 2025 will be a repeat of 2010! After the elections, if they remain in power, PSD-PNL will do everything they know best: they will increase the taxes that Romanians will have to pay, they will cut pensions, salaries and investments in the public sector. Already the whole year 2025 sounds bleak just talking about housing taxes. As you also presented in your material, the tax for a two-room apartment of 50 m2 built in a new building will be three times higher than at present. It’s aberrant. Did Romanians’ income triple overnight or will they triple? Obviously not! I don’t even know if they will increase pensions in the fall.
We cannot agree that the entire burden should be thrown on the Romanians’ backs. Isn’t the burden of increased prices, ever-increasing rates, huge energy bills enough? It is unacceptable that the incompetence of the current government should be paid for by the Romanians. If they do not have money in the state budget, in the local budgets, it is not the fault of the Romanians, but it is their fault, of those who have governed Romania for 35 years.
Instead of thinking about increasing taxes and fees, those in government should come up with solutions to reduce inflation, to reduce state spending, which, by the way, they have been cutting for two years, but not really comes out
I remind you that, in the month of December 2021, both Prime Minister Ciolacu and his coalition partners, the PNL representatives, beat each other with their fists that the fees and taxes that Romanians will pay will not be increased. From zero taxes in the PSD-PNL government, we reached a government with only new or increased taxes. Leave, dear governors, the political propaganda and do your job! You have assumed the government of the country, then govern and come up with measures for the people, not against them!”, commented the spokesperson of the AUR, for Newspapers.com.
A new wave of tax increases in 2025, warns the opposition: “The government does not want to support the private sector, but to take as much money as possible”
Claudiu Năsui, former Minister of the Economy from the USR, recalls the PSD+PNL promises made in recent years, through which they conveyed that “fees and taxes will not be increased”.
“(…) Duties and taxes have increased so much because spending has increased. Then the government complains that we are going into debt and say we have to raise taxes. The solution was to reduce spending, which they also increased. But they don’t want to do that because it affects their interest groups. They can’t touch them, so they have to raise taxes. What does this show us? That they don’t care about the private environment, but only about officials, about all the agencies they have under their command. The government does not want to support the private sector, but to take as much money as possible from here.
We are talking about a continuation of the same policies for 2025. There are already three rounds of tax increases that have happened. Let’s remember, Ciolacu and Ciucă told us that they will not increase taxes. They lied to us. Two years ago, in the summer, taxes increased sharply, after which came an Emergency Ordinance by Mr. Ciolacu, after which came the responsibility assumption package also of the Ciolacu Government, which passed through Parliament, again a large series of tax and tax increases.
I saw what Mr. Boloș (Minister of Finance of PNL) also said. Taxes will increase again, which will slow down the economy even more, I will be bankrupt again”, he commented for Newspapers.com Claudiu Năsui, former Minister of Economy, from the USR.
Government waste: “€200m for Netflix and Disney”. What solutions does the opposition propose for 2025
Claudiu Năsui claims that there are many perspectives in terms of reducing government waste. The “party files” can be removed from public institutions, and the “gifts” given by the executive to large foreign companies, if they are eliminated, can make Romanians’ taxes and duties not be increased, but even reduced, the former minister stated.
“For 2025, spending should be reduced and labor taxation should also be reduced. Romania has one of the highest labor taxes in all of Europe, and we should act there. We have a project, ‘zero taxes on the minimum wage’. This can be done, this is the second year we have come up with this project, we have shown again, line by line, what expenses can be cut and reduced. There are many expenses that can be cut, presented in the ‘alternative state budget’: state aid schemes that are, in fact, redistribution from the poor to the rich; reduce the subsidy to the parties by 90%, so what it was before Liviu Dragnea changed the law; stop increasing special pensions if you don’t give an OUG like Emil Boc did, when he cut special pensions, less for magistrates; stop the PNDL, which is a program to enslave the town halls, from the Government.
We have reached 1.3 million budget workers at the state, in the conditions in which the country’s population is decreasing. The administration can function with 800,000. There is no need for so many agencies anymore. Why does the Romanian state have to pay Disney and Netflix 200 million euros, in the form of a subsidy? It’s taxpayers’ money. At least give free subscriptions to all Romanians, right? We pay hundreds of millions of lei to Mercedes-Benz, so also money and taxes. This is not capitalism, but a socialism where the ruling class does everything for their own good. There is money, but it’s badly managed”, Năsui also conveyed, for Newspapers.com.
Tags: subject governing alliance avoids talking election year worse situation anticipated
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