Budget revenues drop 7% in Q1 2009

Revenues from income taxes registered the sharpest decline, of as much as 17 percent, amounting to €2.12 billion. Businessman Marius Ghenea, who controls IT distribution and e-commerce company FiT Distribution, said that this figure shows the impact on certain sectors of the international crisis. “I was expecting a sharper decline, given that operations in most sectors registered a severe slowdown. The percentage of the decrease could even double in the coming quarter,” he added.Budget revenues from the revenue tax amounted to RON 4.99 billion (€1.19 bln), while the value added tax (VAT) was RON 8.53 billion (€2.04 bln). Revenues from excise taxes were RON 3.2 billion (€0.76 bln), some 8.91 percent higher than initially estimated. Romania agreed with the International Monetary Fund (IMF) to increase budget revenues by 0.25 percent of gross domestic product (GDP). Amid this economic and financial crisis, when some companies are ceasing operations and others are no longer profitable, the government is attempting to reach this goal by widening the base of taxation, with a lump-sum tax or minimum fee, without increasing the current 16 percent flat tax or the level of VAT.