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Nov 02, 2017 15:56 EEST
November 2 (SeeNews) - Romania's president Klaus Iohannis on Thursday asked the governing coalition to abandon a series of tax changes which in his opinion could lead to fiscal turmoil.
In October, Romania's ruling coalition formed by the Social Democrat Party (PSD) and junior centre-right Liberal-Democrat Alliance (ALDE) unveiled a draft emergency ordinance project to amend the country's fiscal code. The project introduces tax and income changes starting January 2018 which have been widely criticized by the business environment.
The changes not represent a much-wanted fiscal revolution, but have the potential of generating a fiscal turmoil, president Klaus Iohannis said in a public televised statement.
"The government wants to shift social contributions from the employer to the employee and to cut income tax. At first glance, these changes seem interesting, but a more in-depth analysis shows that they increase problems rather than solving them," the president said.
"Therefore, I ask the ruling coalition formed by PSD and ALDE to show responsibility and to give up this kind of fiscal policy that generates mistrust, uncertainty, and ultimately does not help anyone."
Iohannis also noted that Romania's robust growth this year is good news, but that it is not stable as it is based on consumption and not on investments.
The foreign investors' council in Romania, FIC, said last week that although Romania's economy is growing, investor confidence is deteriorating due to the ever-changing fiscal policy.
Although the high economic growth rates are being translated into increased revenues, business and employment growth, they will not be sustainable on the current path, FIC said.
In 2016, Romania's economy grew by 4.8% year-on-year compared to a revised growth rate of 3.9% in 2015.
Romania's government expects a 5.6% economic expansion in 2017.
(1 euro=4.5981 lei)
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