How to “read” an economist The fiscal package announced by Prime Minister Bolojan on Wednesday: Inflation could reach two digits, and the basic scenario is the recession!

The announcement made by Prime Minister Ilie Bolojan about the fiscal package to enter into force was criticized by the economists with whom Hotnews discussed. “Increasing reduced VAT, general quotas, additional excise duties, energy deplazes have the potential to take the inflation rate to a value expressed in 2 digits,” says Adrian Codirlașu, CFA Romania presidentInvestment Professionals Organization.

Most of the adjustment comes, as in the past rounds of tax increases, also from the taxation of the population through indirect taxes (VAT, excise duties) and much less from the reduction of expenses, draws the attention of Adrian Codirlașu.

He gives the example of the VAT GAP (the difference between the VAT that the state should be collected) over 30%, by far the largest in the EU, the next country comparable to us being Slovakia, with a GAP of below 15%.

“Surely something we do not do well in VAT collection!”, He says, adding that a VAT increase without measures to reduce the evasion will put the additional tax load also on good payers and will generate even more inequity. “A measure to improve the collection is the reverse taxation, which is already used in Romania precisely in the sectors where the risk of evasion is high,” explains the specialist.

Increased reduced VAT quotas, general quota, additional excise duties, energy depharification have the potential to take the inflation rate to a value expressed in 2 digits, he believes.

The increase in capital taxation, given that Bulgaria has 10%, is much more stable from a fiscal point of view and will enter the euro area, can lead to the departure of companies from Romania and move to Bulgaria, warns the economist.

The basic scenario for this year is the recession

He believes that after this private economy tax package, the basic scenario for this year is the recession.

“The reduction of the deficit had to start from the expenses. The given signal, taxing the entire private sector for the excesses of the last years of the public sector, is of deep social inequity. The European Commission has signaled precisely, including last year – expenses of the public sector, especially on the discretionary payroll. Adding that in the last two and a half years there were 5 tax increases, each increase came with the promise that public expenses were reduced, only that, on the contrary, they were growing.

“This is exactly what in December last year I had an increase in taxes to carry the budget deficit to 7% (budget project voted in February). After no 3 months of statistical data, that project is brutally contradicted by the economy, without having happened remarkable from an economic point of view. With the 7-year discount plan, agreed with the commission.