Fiscal system not efficient

The current fiscal system is not efficient and has led to a decline in budgetary revenues, to the reduction of foreign investments and to a slower rate of growth in terms of industrial output, stated economic analyst Liviu Voinea, research director of the Applied Economics Group, quoted by Mediafax. The flat tax freed about one billion euros in cash in the economy, 600 million of which retained by companies and the remaining 400 million by individuals. However, the companies have not invested this money in increasing production and the population spent it almost entirely on consumption. The result was slow industrial output growth (only 1.5% in the first nine months, compared with growth of 4.4% in the first nine months of 2004), and a consumption boom (over 11% in the first half compared with 8.8% in the fist half of 2004). Another effect was a slowdown in the pace of investments in the economy (which advanced just 7.6% as compared with 10.4% in the first half of 2004). ZF