ECONOMICS: Fiscal Policy Issues: A Look Ahead
ECONOMICS: Fiscal Policy Issues: A Look Ahead

Summary/Abstract: In the Economic section, former Finance Minister Daniel Daianu discusses urgent issues of fiscal policy that confront Romanian decision-makers. The tax reform, it is argued, should be based on creating a unified tax administration department, encouraging voluntary compliance through the delivery of modern and reliable taxpayer assistance services, ensuring well-targeted audit and other control activities, timely following up on unpaid debts, and streamlining the VAT policy, including by terminating an array of exemptions. The tax system must be insulated from the pressure of vested interests. Equally, reducing the payroll tax (currently at 57%, amongst the highest in Europe) may contribute to diminishing labor disincentives. Finally, specialized financial institutions should be set up, in order to facilitate the access to funds by small and medium enterprises.

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