The proposal by some government officials to reduce VAT on basic food products to zero is nonsense in the current environment, according to Professor Daniel Dayanu, President of the Fiscal Council.

“It would be inefficient and also mean a loss of tax revenue. We have a budget deficit every 5 months, this shows that if we do not take strict measures to increase tax revenues, then the deficit in 2023 will not be less than last year (when it was 5.74% of GDP), but may be even higher big,” Dayanu confirmed.

According to him, to consider that the budget consolidation approx. 3% of GDP solely due to the reduction of budget expenditures is a chimera.

“Should we cut capital expenditures by a few percent of GDP? And budget craftsmen can not do. In the Fiscal Council, we are concerned about the implementation of the budget and the delay in adopting clear measures to reduce the deficit,” he says.

• “It is not by chance that the Fiscal Council and other intelligent economists emphasized the need for a massive reduction in tax benefits to reduce the budget deficit”

“This was a signal last year as well, as during the analysis of the budget structure for 2023. Times are difficult, but they could become even more hostile, with more painful consequences for citizens, if we do not make a systematic fiscal correction. “, – evaluates Dayanu.

PNRR, he says, can help us a lot in this matter.

“This can support reforms, help finance the external balance and mitigate the contractionary effect of the budget correction. Courage must exist even if 2023 is an election year and even if the votes that favor a tax regime that benefits them strongly oppose it,” Daniel told Dayanu.

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