The 2023 budget was built on a target of a cash budget deficit estimated at 4.40% of GDP, and a deficit of the EUS estimated at 4.40% of GDP, according to the 2023 draft cap law.

Surprisingly, the background note states that the budget is also based on “changing the way taxes and property taxes are calculated.” That is, the document refers to Resolution 16 on tax increases, which provides, among other things, the use of a network of notaries, which will increase property taxes several times.

Although this was a project to expand the provision, it was passed in the parliament, but it was blocked and sent to the KKR. Considering the fact that this is written in the draft limits, this means that the Government is not going to solve the situation by taking amendments from the Parliament into a new normative act.

Returning to the document submitted for discussion by the Ministry of Finance, it is said that according to estimates for the period 2023-2025, the ESA budget deficit in 2023 is 4.4% of GDP, and in 2024 it will reach 2.95% of GDP, respectively. a decrease of 3.3 percentage points compared to 2022, which falls on the end of the forecast horizon in the provisions of the European rules (2.9% of GDP in 2025).

For 2023, the proposed ceiling of the national debt according to the EU methodology is 49.8%.

Ceiling Act 2023 – Explanatory note – click to open

According to the rationale, the following measures were taken into account when building the budget for 2023-2025:

• reduction of the maximum amount for micro-enterprises from EUR 1,000,000 to EUR 500,000, establishment of a condition for micro-enterprises to have at least 1 employee, abolition of the 3% tax rate;

• an increase in the preferential VAT rate from 5% to 9% for accommodation in hotels, restaurants and catering services, an increase in the preferential VAT rate from 9% to 19% for soft drinks with added sugar, the application of a preferential VAT rate of 5% for the purchase of a separate house, the value of which does not exceed 600,000 lei;

• expanding the benefits provided to workers in the construction industry for workers in the agri-food industry who receive a monthly gross income from wages up to 10,000 lei, setting the minimum wage for workers in the agri-food industry at the level of 3,000 lei, establishing a base for monthly calculation of insurance contributions, social and health insurance contributions to the general minimum wage in the country, which is guaranteed in payment, for income received on the basis of individual contracts for part-time work, the level of which is lower than the level of the gross minimum wage guaranteed payment of wages in the country;

• increase in the level of excise tax on cigarettes, heated tobacco and nicotine-containing liquids intended for inhalation using an electronic device;

• increasing the tax on dividend income from 5% to 8%, revising the system of providing personal deductions to employees, making changes to the norms of taxation of the income of individuals from the transfer of goods for use, as well as from gambling, making changes to the provisions on taxation in case of transfer of rights property and its division, in the sense of canceling the tax-free limit and introducing differentiated tax rates depending on the period of ownership;

• abolition of provisions on taxation of additional income of electricity producers;

• application of monopoly tax in electricity and natural gas until December 31 (OG No. 5/2013) and tax on the amount of difference in prices for the sale of natural gas (OG No. 6/2013), 2025 inclusive;

• changing the method of calculating property taxes and fees;

• annual distribution of a share of 90% of the net profit received in the form of dividends/payments to the state budget for national companies, national companies and companies with full or greater state capital, as well as autonomous governments.

• in 2023, starting January 1, the gross amount of basic salary/residual positions/position salaries/monthly employment allowances paid to employees from public funds increases by 10% compared to the level provided in December 2022, without exceeding the nominal value for 2022, established in accordance with the annexes to the Framework Law no. 153/2017, with further changes and additions, respectively by multiplying the rating coefficients by 2500 lei.

• in 2023, from January 1, the amounts of allowances, allowances, compensations, bonuses and other elements of the labor remuneration system, which are included in accordance with the legislation in the monthly accrued salary, monthly salary, with the exception of the balance of degrees and salary received by employees, are paid from public funds, is kept at most at the level of the amount provided for the month of December 2022, to the extent that the personnel occupy the same position and perform their activities under the same conditions;

• preservation of the amount of monetary support at the level of 2022;

• additional work that is performed beyond the normal duration of working hours by employees of the budget sphere, who are entrusted with implementation or management, as well as work that is performed on weekly rest days, holidays and other days that, according to the current legislation, do not work during the normal working day work shift, will be compensated only for the free time corresponding to them, subject to certain exceptions provided by law.

• in 2023, state employees will not be given vouchers, with the exception of nursery vouchers, which are regulated by Law No. 1000. 165/2018 on awarding vouchers as amended and supplemented, as well as prizes.

• in 2023, athletes and technical teams who have achieved outstanding results at official international and national sports competitions, pupils, students, scientists and teachers who have won distinctions at international Olympiads and international and national competitions in educational disciplines and for teachers can be awarded, who prepared them at the expense of budget funds.

• in 2023, the amount of monetary compensation, respectively, the value allowance for food rights, the annual financial cost of equipment standards and the financial cost of equipment rights at the level provided for December 2022, were retained in the payment;

• in 2023, benefits or, as the case may be, allowances are not granted on retirement, retirement, discharge or transfer to the reserve.

• on January 1, 2023, the pension score is set at 1,785 lei;

• from January 1, 2023, the social allowance for pensioners is 1,125 lei;

• in 2023, financial assistance is provided to pensioners of the state pension system, pensioners of the state military pension system and beneficiaries of rights provided for by special laws, which are paid by territorial pension houses/industry pension houses, whose monthly income is less than or equal to 3000 lei, depending on the monthly income. The cash assistance is paid in two equal installments in January and October 2023, respectively.

• phased payment of court decisions in order to grant the right to wages to employees of the budget sector;