State budget already registering 0.63% deficit

The state budget registered a 0.63 percent deficit in February, compared to the same period in previous years, when a surplus was registered only in the third quarter of the year. Furthermore, the government is currently working with a budget set to register a deficit worth only 2 percent of gross domestic product (GDP). Compared to February 2008, total revenues to the state budget dropped some 6.8 percent, while expenses rose 10.1 percent, according to a declaration yesterday by Finance Minister Gheorghe Pogea. “As far as revenues are concerned, the main drop was registered for the income tax, 13.4 percent, and VAT collection, at 7.6 percent. On the other hand, revenues from salary taxes have risen,” Pogea added. In terms of expenditures, social security spending and the interest segment had the highest increase, while salary expenses rose only 2.8 percent year-on-year. In an attempt to increase budget revenues, so that Romania is able to comply with the 4.6 percent budget deficit agreed upon with the International Monetary Fund (IMF), the Finance Ministry is looking for ways to increase budget revenues. Thus, all companies could be compelled to pay a minimum tax even if they fail to register profit several years in a row. “I cannot accept that [a company] posts 70 percent losses for three years, I cannot believe that [owners] bring in their own money,” Pogea said. Many companies manage to annul their earnings on balance sheets in order to avoid paying income taxes.