"This can certainly not only be adopted, but also kept in the years ahead and beyond the strict calculation sheet, or, as someone would say beyond the CAP bookkeeper mentality - who only collects on a piece of paper something, it is sustainable from the point of view of fiscal economic policies promoted in the last two and half years. Obviously, when you take important decisions, they reflect economic thinking. If today we had the same strict approach, limited to numeric and accounting, Romania would have never had the flat rate nor the reduced VAT on bread "Ponta said in a press conference at the Government.
He pleaded that the CAS reduction may be covered by extra social contributions receipts on the new jobs created, additional revenues from VAT as a result of potential new investments, debt recovery from insolvent companies, reducing evasion on CAS.
Prime Minister presented to the Government, a material which states that the reduction in employer social security contributions, which implies a cost of 4.8 billion annually, may be covered by additional revenues from CAS, CASS, unemployment contributions and income tax from the creation of new jobs (with receipts estimated at 1.3 billion) plus additional VAT collections due to new investments that the head of Government relies on (1.25 billion).
To these were added, in his opinion, other sources, namely the recovery of debts from insolvent companies (the Government calculation is that it would thus receive 4 billion if 10% of the debts are recovered), the reduction by 10 % of the tax evasion estimated on CAS (1.9 billion), increasing the minimum wage in 2015 and additional budget revenue from higher nominal growth in 2015
The material includes 12 arguments for reducing CAS on October 1, namely economic growth, budget deficit, public debt, industrialization, European funds absorbed, infrastructure investments, increased wages, pensions and social measures, jobs creation, tax-policy, tax receipts to the budget and NAFA reform, effects on CAS-past and future.
The Prime Minister also said that the benefits of reducing CAS would be 70,000 new jobs, with the surfacing from the underground economy of 77,000 jobs, increased foreign direct investments, recovery of companies arrears to the budget.
Ponta thus showed that the reduction in social security contributions is sustainable beyond the " CAP bookkeeper " calculation mentality.
Two weeks ago, President Traian Basescu said he got for promulgation the law on reducing social security contributions and had doubts about the appropriateness of the measure, saying he believed that the government aimed to cover the resulting deficit from decreasing CAS by property tax increase by 2-3 times.
On Saturday, President Basescu said he would not promulgate the law to reduce CAS until he was convinced that the measure was economically viable and showed that he expected from the Government an assessment in this regard, to convince him that the reduction will not be compensated for by the introduction of new taxes.
The Government approved the bill in June that provides 5 percentage point reduction in employer CAS starting October 1. The project was later adopted by the Senate and Chamber of Deputies.