What the newspapers say: July 26, 2010 

As the IMF mission arrives in Romania, coalition members will give the Finances a green light to start negotiationsto cut the flat tax at 10% and the VAT at 25%. The Fiscal Code is about to be modified starting this Fall so that consumers could receive a bonus if they keep their fiscal invoices, one newspaper reads on Monday. Elsewhere in the news, the US sent a fax to Romania that was actually destined for Russia.

Evenimentul Zilei reads on Monday about the visit of the IMF mission for the evaluation report to relase the sixth instalment. Members of the coalition will give the Finances a green light to start negotiations with the IMF to cut the flat tax starting January 2011.

Even though the Finance minister declared that the coalition does not plan to modify the tax system, the governing coalition is about to surprise him because in today’s meeting the government will discuss these issues, sources within the coalition declared for the newspaper.

The government plans to cut the flat tax for revenues and profits to 10% and increase the VAT to 25% and also increase other taxes to make up for the gap, sources declared. Even new taxes might be introduced on agriculture like a tax for not cultivating the land.

The increase of the VAT with one percentage point will not have toxic effects and will cover the gap that will be left by the flat tax decrease. However, the decision will be taken in agreement with the IMF only. The decrease of the flat tax is seen as the most important element to sustain economic growth and attract foreign investments, sources declared.

Elsewhere in the news, Romania libera reads that the Fiscal Code is about to be modified as of this Fall so that costs with rehabilition works for the households will be fiscally deductible and consumers who gather their fiscal invoices will receive a bonus.

PM Boc announced a series of measures to counter fiscal evasion. The measures were listed in general, without an estimated calculus of what is about to be drawn to the budget and without implementation measures.

The government will offer consumers a percent of the fiscal invoices gathered over a period of time, up to a ceilling set by the government in an attempt to counter fiscal evasion. Finance minister Vladescu said that even though there are not official statistics regarding the black market, estimates reveal that it makes up about 20-40% of the total.

Businessmen declared that the government needs to change the fiscal system as well if it plans to implement these measures. Such measures are already implemented in some countries in the EU. For example, in France, house maids, nannies or garderners paid based on legal contracts are deductible.

Last but not least, Gandul reads that US State Department accidentally sent a fax in Romania that was meant for Russia authorities. The information was related to the arrest of a Russian drug dealer. Now Moscow accuses the US for kidnapping and breach of international agreements.

US appologized to Russia after a fax containing important information was sent to Romania. According to a US – Russia protocol, the countries need to announce such cases to the other party immediately. However, the fax was sent to Romania instead of Russia.