The International Monetary Fund recommends that Romania adopt a package of fiscal measures that would shift the tax burden from labor taxation, including social contributions, to consumption taxes and, to a lesser extent, on capital, the institution estimating that, if fully implemented, these proposals could generate revenues of at least 1.2% of GDP in 2025, writes Ziarul Financiar.
Romania’s medium-term fiscal framework envisages the fiscal deficit gradually declining from around 8% of GDP in 2024 to 7% in 2025 and 3% (or less) by 2031.
“With limited scope for expenditure consolidation – given the low share of expenditure in GDP – revenue mobilization is imperative. The IMF’s technical assistance proposes a package of fiscal reforms aimed at raising revenues, improving work incentives and closing loopholes for abusive tax planning. The main recommendations aim to shift the tax burden away from taxation on labour ...