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Wednesday, February 09, 2005

The fiscal measures agreed with the International Monetary Fund

The increase of taxes on interest from 1% to 10% starting April 1, 2005.
The increase of taxes on interest for non-residents' incomes from 5% to 10% starting April 1, 2005.
The increase of taxes on capital profits from 1% to 10% starting April 1, 2005.
The increase of taxes on real estate transactions for legal entities from 10% to 16%
The reduction of production expenses and services.
The reduction of state aid and transfers.
The current account deficit for 2004 to be set at 7.2 percent.
Completion of the privatization of electric power distribution (Electrica Banat, Dobrogea, Moldova and Oltenia and Electrica Muntenia Sud) as well as three other energy complexes (Turceni, Rovinari and Craiova).
The privatization of the Romanian Savings Bank and the Romanian Commercial Bank
The privatization or elimination of Electroputere, Tractorul and Rulmentul, three large companies which remain under the control of the Authority for the Recovery of State Assets (AVAS).
Selling three small companies under AVAS control each semester.
Leasing 3,000 km. of rail lines.
Laying off 6,000 miners in two stages.
The median salary in 2005 will be 244 euros.
Incresed prices of 20-25 % of current prices. On the first of April the price of gas will be 74 euros per thousand cubic meters and will increase in July to 82 euros per thousand cubic meters and to 86 euros in October.
The cost for thermal power will see a 20 percent increase on July 1, 2005.
Simultaneous tax increases will be made for mineral oils, tobacco and alcohol, according to previous agreements with the EU.
The capital account liberalization, which will be completed by this summer in response to the European Commission's request to do so. At the beginning of last year, the Romanian National Bank postponed the next stage of the capital account liberalization and established that people without a legal residence will have access to short term lei deposits by April, at the latest.Afterwards, the IMF representative in Bucharest, Graeme Justice said, the liberalization can only be done in the first half of this year if government expenses are seriously reduced. Regardless, the IMF would not be willing to postpone the liberalization.