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Divergent opinions over the new Fiscal Code

The decision by president Klaus Iohannis to reject the new Fiscal Code and send it back to Parliament for debate has sparked discontent in the ranks of the government in Bucharest.

Divergent opinions over the new Fiscal Code
President Klaus Iohannis. Photo: presidency.ro.

Articol de Radio România Internaţional, 21 Iulie 2015, 10:19

President Klaus Iohannis has motivated his decision not to endorse the new Fiscal Code by saying that the measures of fiscal relaxation it provides for will significantly impact the budget structure.

The new Fiscal Code should promote policies leading neither to excessive taxation nor to increased relaxation, president Iohannis said, in line with the serious reservation expressed earlier by the European Commission.

The European body has cautioned over the risk that, without measures to significantly improve the collection of taxes and duties, a cut in these taxes, particularly in the VAT, might lead to an excessive deficit, which could run against both the European regulations in this field and the agreements Romania signed with the IMF as part of the latest precautionary loan accord.

The president's decision sparked heated reactions from the ruling coalition.

Prime Minister Victor Ponta described the president's decision as running against national interest.

The Social-Democrats, number one in the government, have lashed out at the main opposition party, the National Liberals, whom they have accused of excessive politicizing.

Rovana Plumb, who is the interim chairman of the Social Democrats after Victor Ponta stepped down from this position due to his being under criminal investigation, said that the situation is a huge political charade.

"From my point of view we are seeing a huge political charade. It's an incredible insolence of political partisanship on the part the new National Liberal Party, which is reneging on its own vote in Parliament. Now they don't admit they have taken part in all the consultations and debates in the expert committees over this document, nor do they recognize their contribution to this Fiscal Code or their endorsement of it", Rovana Plumb said.

The Liberals in turn recalled that, in spite of the yes vote in Parliament to a fiscal code which was supposed to be business-friendly, they have always voiced doubt regarding the sustainability of the envisaged tax cuts.

Stung by the harsh tone of the Social-Democrat chairwoman, Alina Gorghiu, co-chair of the National Liberal Party, has suggested that Rovana Plumb should not copy the Prime Minister's stylistic discourse, but have a more elegant one.

On the other hand, the Liberals are backing the alternative of a special Parliament session entirely devoted to reassessing the new Fiscal Code, and are vehemently rejecting the idea that the government should assume responsibility for the bill.

"It would be tantamount to mocking the Romanian people, the business environment in Romania, to assume responsibility for a projection, when you no longer have the consensus of political forces. Why? Because you fail to ensure legislative stability on medium and long term", Alina Gorghiu said.

What was supposed to be a debate on policy issues slid into domestic politics as usual, fraught with impassioned discourse and arguable political stances.

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