More than 1.5bn-euro profit tax this year

The gross profits of all the companies in Romania will hit a record high of a total 6 billion euros this year, which is 40% above last year’s level. This is what the Finance Ministry’s budgetary revenues in the first half show.

It was inevitable that the economic growth was going to be evident in the state budget revenues: profit tax-related revenues rose 57% in ROL for the six months ended June 30, 2004, totalling about 30,000bn ROL.

In the event of the trend maintaining in the second half, the profit tax-related budgetary revenues should amount to approximately 60,000bn ROL, that is, nearly 1.5bn euros. This means total gross profits of 6bn euros for companies in Romania.

As a comparison, Romania’s state budget expects full-year total revenues to stand at 7bn euros, while exports are estimated at 18bn euros.

First half data shows the Romanian State has its “pockets full”.

Subsequently, the deficit is the outcome of the investments made (foreign loans secured by the State account for 16,000bn ROL being taken out of the consolidated budget), rather than being due to high expenses related to the pension system (only 2,000bn ROL deficit in the first half).

At the same time, even though patients in hospitals are being forced to bring their own medicines, supplies and cash to ‘tip’ the attending personnel (doctors, nurses etc), the deficit of the single health insurance fund stands at a mere 2,700bn ROL (66 million euros) for the first half of this year.

In fact, both the state and the consolidated budget (which includes the public pension fund, the health insurance fund, the unemployment fund and the local budgets) have enjoyed better than expected performance in terms of deficit reduction for two or three years now. sorin.pislaru@zf.ro