In the first 7 months of this year, Romania’s budget deficit amounted to 38.6 billion lei, which is 2.43% of GDP. For comparison, in 2022 for the same period it was 1.89% of GDP (26.7 billion lei), this is on the condition that this year we should have a smaller deficit, 4.4% of GDP at the end of the year.

If the budget was well written, this negativity would not exist.

On the revenue side, there are a few things to note if we look at the note.

Wage and income tax revenues amounted to 23.86 billion lei, registering a growth of 22.3% (year/year), which is determined by:

• increase in dividend tax revenues (71.1%) – this refers to a significant increase in dividends distributed according to the interim financial statements prepared during 2022, with a withholding tax rate of 5%.

• tax on income from pensions (42.1%) – including an increase in the pension point by 12.5% ​​(from 1,586 lei to 1,785 lei), starting from January 1, 2023.

• receipts under a single declaration have positive dynamics – 11.6%.

In the conditions in which people comply, if we mean independent activities, and the amounts are higher, the Government wants to tax these people even more by canceling the payment of CASS at the level of 6, 12 or 24 salaries. Basically they want to pay the full amount. Most likely, many will migrate to micro-enterprises, even if changes are expected there as well.

Objects of construction, agriculture and food industry are recorded as a negative factor

According to the Ministry of Finance, income from the wage tax increased by 10.4%, which is lower than the growth of the wage fund in the economy (15.1%).

The dynamics of this category of income is affected by the expansion of benefits granted to builders in the agricultural sector and the food industry, new fiscal measures regarding the modification of personal deductions (OG No. 16/2022 was introduced), respectively, the non-taxation of the amount of 200 lei/month for employees who receive the minimum wage.

The same negative effect is also mentioned regarding the impact on health.

Insurance premiums amounted to 90.56 billion lei, increasing by 13.3% (year/year).

“As in the case of the wage tax, their dynamics were lower than the dynamics of the wage fund in the economy due to the expansion in the agricultural sector and the food industry of the benefits granted to builders,” the Ministry says. finance

Also regarding CASS, the Ministry is also talking about a measure to stop paying CASS for pension incomes over 4,000 lei (CCR Decision No. 650/15.12.2022 regarding the unconstitutionality of GEO provisions No. 130/ 2021).

Also, starting from March 1, 2023, the amount withheld under the name CASS from pension income (budgetary effect -0.3 billion lei) was also returned – the application of the provisions of GEO 4/2023 regarding the establishment of measures for the return of certain social health insurance contributions.

As in the case of income tax, the tax-free amount of 200 lei from the minimum wage is also mentioned as a negative factor.

Expenses increased by 14.6%

Expenditures of the general consolidated budget in the amount of 326.66 billion lei increased in nominal terms by 14.6% compared to the same period last year, according to the addendum on the implementation of the budget.

Expressed as a percentage of gross domestic product, spending in the first seven months of 2023 rose 0.3 percentage points compared to the same period in 2022, from 20.2% of GDP to 20.5% of GDP.

Personnel expenses amounted to 74.55 billion lei, an increase of 9.7% compared to the same period last year.

Those with interests rose in price by 14.4%. The gross financing requirement is 68.7%.

See the budget execution report for 7 months