Romania does not need the financial assistance of the IMF and there is no need to increase the VAT, explained, on Wednesday, the head of the IMF mission for Romania, Kees Martijn, during a press conference at the end of the consultations with the Romanian authorities.

“We reiterate the fact that it is important for Romania to put public finances on a healthy path, making a proper restructuring of the fiscal area. We see that the fiscal package will be a very important first step in this direction. Regarding the IMF support, the first thing what I want to mention is that each member country has the right to request IMF assistance, but at this stage we do not see the need for Romania to do so and we do not expect such a need to arise, which is why we have not had such discussions with the authorities,” said Kees Martijn, quoted by Agerpres.

He was also asked about the possibility of introducing progressive taxation and mentioned that this topic was discussed last year.

“The possibility of progressive taxation is a topic that I discussed a year ago with your authorities and it turned out that a necessary first step is that of cleaning up the tax system. Regarding legislative loopholes, exemptions and preferences then the single tax that you have now it will not be able to exist and you will have to think about progressive taxation. You must first make sure that everyone pays their fair share, and the tax package provided a first step in that direction,” said Kees Martijn.

The journalists also asked if there is a need to increase the VAT by two percentage points if the tax package will not come into force.

“We’ve talked about the range of revenue measures that could help reduce the fiscal deficit in 2024 and beyond. They’re growth-friendly measures, and we think many or all of the adjustments can be made with these measures. We hope that this will be possible to avoid more drastic tax increases, such as the VAT increase, but we realize that the Government has all the tools on the table and at the moment we are not proposing such an increase. Based on the information we have in the present moment,” Kees Martijn also said.

In the press release published at the end of the visit to Romania, the IMF showed that other tax reforms are necessary to increase revenues, efficiency and fairness. “An increase in revenues of more than 2% of GDP, apart from those brought by the recent fiscal package, will be necessary in the next two years”, emphasizes the IMF.