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de Marin Pana 12.2.2017

The great undertaking of the 2017 budget execution has been launched, with the presumption of 50 basis points decrease in the current revenues, according to the data from the Ministry of Finance website.

Almost the whole increase of about 15% compared to the previous year would come from the money received from the EU.

We present below some of the most important sources of revenues, to get a picture of what is happening with the public money and specifically from where they come.


  • Budget revenues       Billion lei
  • Budget revenues
  • Current revenues
  • Tax on profit
  • – companies
  • – commercial banks
  • Income tax
  • – wages
  • – pensions
  • – dividends
  • – professional activities
  • – interest
  • – transfer of individual immovable property
  • – transfer of securities
  • – non-residents
  • Property tax
  • VAT
  • Excise duty
  • Gaming tax
  • Property income
  • – dividends
  • Amounts received from the EU
  • – Amounts received from the EU/other donors in the account of payments made and pre-financing for financial framework 2014-2020


We can see how rising the wages would bring an increase of 4 billion lei to the budget revenues. The increase is spectacular, one fifth in absolute value, even higher than the one-sixth increase of the national minimum wage from 1,250 lei to 1,450 lei; a minimum wage that we will find officially in about half of the employment contracts at the national level.

To find an explanation for overperforming in the rule of three, we can look at the elimination of the threshold of five national average salaries for tax (mainly applied to about 36,000 employees from top management and IT sector). But the effect of the tax evasion increase (in December, a few too many employees earning the minimum wage have been already fired, on paper) has not been measured for sure.

About one billion lei in revenues will be lost by drastically reducing the tax on pensions

Basically, the increase in property income comes from the massive increase, by administrative means, of the dividend income (+ 42.5%) and also brings almost one billion lei but risks leaving the state companies without resources for investment and modernization.

Quite bizarre for a so-claimed social democratic party, it is introduced a “partial tax amnesty” granted for the dividend income, expected to decrease by over 30% in a year of robust growth, after another year of robust growth. Well, if we cannot collect more money from dividends even when we have such increases, then from what source should we finance the society?

As for the contribution of the banking sector to the state budget revenues, it is hard to say whether we should cry or laugh. On the principle of individual charitable donations from tax, poor financial institutions are going to contribute to the budget only 2% of the contributions of the companies whose money gets through their accounts.

But the funniest joke is about the source of the overall growth in total revenue of the state budget; which would not increase naturally, even from higher collections following the economy advance of 5.2% (!), but strictly because the EU will give us about five times more money this year than last year.

We added together the amounts from the EU granted in 2015, 2016 and 2017 on the two distinct positions from the budget to take account of the change following the transition to the financial framework 2014-2020 and for you not to think that the increase of 22,822.1% (!) from the table would be a gross editing error.

In this “simple” way, increasing sources of revenue could be found to finance the expenditure, a topic to which we will come back.

Taking that into account, we can only hope to achieve the revenue target from the state budget law and thank the European Union for any external support to sustain the revenue growth of a state that remained to stand at its courtesy.

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