VAT uncertain. Consultants say fiscal strategy is not for real

The flat tax and social contributions will not be modified until 2013, the VAT level remains uncertain and the cut in salaries and number of employees will not be offset any sooner than 2013.
These are but some of the provisions of the budget-fiscal strategy for the next three years endorsed by the Government on Wednesday, which also includes information on the trend of expenses of ministries from 2011 through 2013.
Tax consultants believe cannot talk about a real fiscal strategy, because its provisions are unlikely to stimulate investment and eliminate overtaxation of labour.
As for maintaining the income tax at 16%, the document that Mediafax obtained reveals that the medium-term collection trend is generated by the moderate growth of the gross average wage in sync with productivity and collection from income tax will maintain at 3.3%-3.4% of GDP in 2011-2013.
The fiscal strategy also reveals that the VAT trend will comply with Romania’s commitments undertaken before the IMF, but does not specify whether the new 24% level in place since July 1 remains in use on medium term or not.