More money for the companies?

Finance minister Mihai Tanasescu has pledged that taxes, especially in the field of companies’ contributions to the social security budget, will be cut down next year.

“We are planning to cut the level of contributions to 25-30%, against the current 40-45%. We must find a way to offset this decrease, given the huge pressure on the social security budget,” Tanasescu told a meeting with the members of German Businesspeople in Romania Club.

The deficit of the social security budget stood at 4,502.5 billion lei over the first five months of the year, although the Labour Ministry has launched a campaign to collect the debts accumulated by a large number of companies.

“We will focus on the pension issue next year, as it is one of the most delicate problems we are facing, given the gap between the number of pensioners and the number of employees and between the quantum of pension revenues,” Premier Adrian Nastase said.

He added that fiscal policy would be a priority for the Government. “The Government in two weeks will begin to discuss the first draft laws comprised in the legislation package to be enforced next year,” Nastase added.

Government plans for next year also aim at decreasing bread VAT, down to a level that will be set over the next period.

The Finance Ministry promised the German businesspeople that companies’ savings would be 4-5% higher after they pay the taxes in 2002.

Moreover, the Finance Ministry intends to conclude the project of eliminating the special funds, even if the Government keeps establishing such funds.

“All these actions should be performed step by step, together with a tight expense policy, so that we could confine to 3% the budgetary deficit in 2002,” Tanasescu said. The budget draft for 2002 targets 5.2% economic growth and 22% inflation rate, Premier Adrian Nastase said at the end of last week.

This year’s economic growth is estimated to stand at 4.1%. “We intend to conclude the budget draft by fall, so that it could be discussed in Parliament by the end of the year,” Nastase said.