Radio România Internațional

Tag: budget amendment

  • Government makes budget amendment

    Government makes budget amendment

    The first budget amendment this year, which the government adopted on Monday, takes the budget deficit up to 6.9% and revises the economic growth forecast down to 2.8% from 3.4% previously. The amendment is, however, positive, says prime minister Marcel Ciolacu, because it allocates additional resources to major investment projects, while the deficit level is sustainable, given that 8.5 lei out of 10 lei spent will go into motorways, hospitals, schools, gas and water supply networks and other local interest projects.

    The 2024 budget was from the start created around large infrastructure projects and major strategic projects and aimed at improving public services for people, said the finance minister Marcel Boloș, who explained that supporting investments is one of the four important pillars of the budget amendment, alongside support for education, healthcare and social programmes for citizens.

    The minister also said that in order to go ahead with European-funded investment projects, the government has allocated 2.5 billion lei, to be divided as follows:

    “The ministry for regional development will get a further 2 billion lei, the ministry for investments and European projects will get 3.2 billion lei, the ministry of transport 5 billion lei, the ministry of agriculture 4 billion lei and the ministry of finance 11 billion lei.”

    Marcel Boloș said 10.4 billion lei will go into covering pay rises in education and healthcare. The National Healthcare House also got an extra 11.3 billion lei to finance the running of hospitals and for individual medical practices. The local public authorities will also get additional funds to cover pupil transport costs, the fees of caregivers of persons with disabilities and the payment of debts to utility suppliers.

    “The government approved the budget amendment for the state budget, the social security budget and the unemployment security budget taking into account the macroeconomic forecasts drafted by the National Commission for Prognosis”, the finance minister explained. He said the amendment with respect to budget revenues took into account two important factors: a better collection of state revenues, amounting to 10.4 billion lei, and another resulting from the approval of an emergency order on tax amnesty amounting to 7.9 billion lei. The budget amendment was also prompted by an increase in budget revenues following the digitisation of the National Agency for Fiscal Administration and the implementation of anti-fraud modules (e-VAT, e-transport and fiscal risk indicators).

  • Fiscal and financial measures

    The reduction of social security contributions paid by employers; the fact that a number of social categories are no longer obliged to return additional funds received as a result of an accounting error and the amendment of the budget — these are some of the measures coming into force on October 1st.



    Employers have been looking forward to the 5% reduction in social security contributions for at least 5 years, but while it is welcomed by the business community, it has also generated anxiety. Some investors fear the measure may lead to further increases in taxes and fees or the introduction of new taxes next year. Also, according to the secretary general of the Association of Businesspeople in Romania, Cristian Parvan, there is no guarantee that this measure will generate more jobs:



    “It will be different from one company to another, given that the business environment has faced increasing costs this year as a result of an increase in the price of energy, gas and fuel.”



    The measure has also been criticised for political considerations. The coalition government, in particular the Social Democratic Party, which is its largest member, has been accused of trying to score some electoral points head of the presidential elections, as the Social Democrats’ leader and prime minister Victor Ponta is himself running for president.



    Another measure coming into force on October 1st stipulates that around 30,000 Romanian pensioners and 12,000 women with children will no longer have to return money they had received because of an accounting error. Despite the fact that this will cost the state around 70 million lei, the government insists the state budget will not be affected. This is what the prime minister said after amending the state budget for the second time this year:



    “For the first time in many years, budget returns in the first nine months of the year are higher than first estimated when the budget was drafted. The Romanian people have worked hard, honest companies have paid their taxes and fees and fiscal evasion has decreased, so that all estimated resources are now available, and we even have additional resources.”



    Following the recent budget amendment, which has been criticised by the centre-right opposition, additional funds have been allocated to the ministries of labour and development and the local authorities.