The draft says local authorities with overdue debts to the state budget are obliged to reduce the amount of debts monthly by at least 5% or the regional public finance units and the Bucharest General Public Finance Department will transfer state budget funds into their accounts only to pay salaries and related social security contributions.
According to Finance Ministry data, local public authorities registered overdue payments of nearly 2 billion lei (EUR448.259 million) and arrears of nearly RON1.2 billion on June 30.
“Local authorities’ overdue payments have a negative impact on the country’s budget deficit and also jeopardize the deficit targets agreed upon with international financial bodies,” according to the draft’s substantiation note.
Romania has committed to reduce its budget gap to 2.2% of the gross domestic product in 2012, from 4.3% of GDP in 2011.
The Finance Ministry also proposed the account receivables of the Agency of State Domains be administered by the country’s tax authority ANAF. End-July, the agency’s account receivables stood at RON400 million. (EUR1=RON4.4617)