Romania May Miss Fiscal Deficit Targets

by Ulrika Lomas, Tax-News.com, Brussels

23 March 2017

Romania risks missing its fiscal consolidation targets because of overly generous fiscal policies, the International Monetary Fund (IMF) has said.

According to the Fund, programmed tax cuts will come at a cost equal to 0.9 percent of gross domestic product, placing in jeopardy the nation's target of achieving a deficit of three percent of GDP in 2017. Instead Romania will likely post a deficit of 3.7 percent, the IMF said.

As well as recommending that authorities reconsider tax policy decisions, the IMF said that Romania should accelerate the reform of its tax administration to address the fact that it has the largest value-added tax compliance gap in the EU. "Key priorities are to implement a modern compliance risk management approach, strengthen the large taxpayers' unit, and reform the IT system," the IMF said.

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