Romania’s first budget revision for this year will be discussed in a special government meeting tomorrow.
“The draft budget revision projects additional revenues of 1.54 billion lei (EUR348 million) in the second half of 2014, but when adjusted for the swap in arrears – which impacts both the value added tax collection and the social security contributions – and for the changes in the accounting treatment of the transactions with state assets, the revenue collections are in fact estimated to decline by RON128 million,” the Council said.
Moreover, the authorities are yet to identify sustainable resources to compensate for a 5-percentage point reduction in the social security tax rate, as the financing channels presented so far will most likely be temporary, the report showed.
“This will put additional pressure on the revenue and expenditure budgets in the next years, particularly on the budget deficit targets,” the Coucil said.
The draft budget revision projects higher revenues to the general consolidated budget along with increased spending for healthcare, education, defense and transport.
The budget deficit target was kept at 2.2% of the gross domestic product. In 2013, Romania posted a budget deficit of 2.5% of GDP.