Romanian president endorses 2014 budget as government delays car fuel excise tax hike

By bne IntelliNews December 19, 2013

Romanian President Traian Basescu has endorsed the 2014 budget planning of the central government, explaining that the government agreed to postpone by three months the hiking of the car fuel excise tax, HotNews online publication announced.

Basescu added that he hopes that the said excise tax will never be increased. 

He has warned earlier that he would make use of any legal instruments to stop the government hiking the excise tax on car fuel. The hike was introduced by the government as a last-minute solution to meet the fiscal consolidation requirements next year.

The government amended the ordinance on car fuel excise tax hike already, news agency Mediafax confirmed. Under the amendment, the hike is postponed by three months from January 2014.

While not being an element of the 2014 budget planning itself [but rather of the Fiscal Code], hiking the car fuel excise taxes still has a material impact on the budget balance as it was anticipated to generate RON 5bn [EUR 1.1bn] of supplementary revenues.

It remains unclear how this gap would be filled in and whether the IMF and the EC agree with the postponement of the supplementary excise tax – or more specifically with the forecast of budget revenues under the conditions of steady car fuel excise taxes.

President Basescu mentioned the elimination of tax evasion as a source of higher revenues. He previously named the better use of funding from the EU budget as another source. Both two sources are relevant and substantial – but the public administration’s ability to make use of them is problematic and has not been demonstrated in the past.

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