In Romania, we have a problem of income distribution, says Daniel Dayanu, president of the Fiscal Council. “We also have a regressive tax regime. This is wrong because it is regressive. Those with proportionally lower incomes pay more. A change in the tax regime is needed, which would become much fairer. We would also get more revenue,” he said.

What is the dilemma if the tax regime changes

“If you had a fairer distribution of income, given that the propensity to consume those with lower incomes is higher, you could have an increase in target consumption, we would have an increase in imports,” Dayanu said.

• you can’t You have to have a circular economic policy because you have trade-offs that you face.

“That is, you must correct the tax regime, which is unfair, but you must take into account that it can lead to a greater focus on consumption, which stimulates imports,” stated the president of the Fiscal Council.

• You have insufficient trade goods production. You must also have taxable income. You have to comply with the tax regime, but you also have to have more tax revenue.

• Higher tax revenues are necessary because budget consolidation cannot be achieved by spending cuts alone. You can cut spending, but you can’t do it just on the back of windfall inflation, and you can’t go to extremes with spending cuts, even though we have excessive bureaucracy in some cases. Nor can indexation be completely abandoned when inflation is still high.

“It is necessary to prevent borrowing. People should be more considerate even if they have great needs. In order not to get into loans. Banks should be with customers and advise them. Let’s also count on a decrease in inflation, which in a reasonable time horizon will lead to a decrease in the cost of credit,” said Dayanu.

He sees a difficult macroeconomic situation: it is difficult to manage.

“If you say that all politicians are stupid and technicians come and solve it, that is not true. The technicians also made many mistakes. They were also wrong about the deregulation of the financial market and when excessive austerity was introduced in the Eurozone. Even now, they are not taking action on crypto-activity. A technician does not have the answer to all problems. We have to be honest,” he explained.