2021 state budget law to be approved in November

Dispute the crisis through which the country goes owing to the COVID-19 pandemic, the authorities are prepared to make all the budget payments, such as salaries, pensions and other social benefits. Currently, the Ministry of Finance is in the process of drafting the state budget law for next year that is to be approved by the Government in November, Deputy Prime Minister Sergey Pușcuța, Minister of Finance, stated in the meeting of the Economic Press Club, being quoted by IPN.

Sergey Pușcuța said the effects on the budget of the COVID-19 pandemic were first felt in April already. In that period, the average revenues decreased by about 30% on last April. In May, the situation improved and the revenues declined by 15% only on last May. In June, the budget revenues were higher than last year, but in August were similar to those of last August.

The minister of finance noted the spending grew suddenly in the context of the pandemic – for the healthcare system, education, social assistance and for agriculture owing to the drought.

According to him, the budget for 2020 was drafted by taking into account a macroeconomic growth of the GDP of 3.8%. But in July-April, the budget was revised down, with a 4.5% decline in the GDP being projected. “The second quarter of this year ended with a nominal economic decrease of 14% of the GDP, while in the first half of this year we have a 7.1% decline in the GDP even with seasonal corrections. The GDP decline is even more profound than the one that was projected in the April and July state budget law rectifications,” explained Sergey Pușcuța.

According to him, amid such developments the state budget deficit grew suddenly to 16 billion lei and such situations are witnessed by many states that were hit by the pandemic. The deficit as of October is expected to be more pronounced as the largest budget costs are annually incurred in this period. Even so, there is certainty that all the payments will be made on time.

As to the 2021 draft state budget law, the official said that the Ministry at present is collecting information and proposals from the state subdivisions and these were to be presented by October 19, but the deadline was extended until October 25. Afterward, during two weeks, the Ministry will structure them and will have bilateral discussions with each institution apart so as to decide which of the costs are essential and which can be optimized. In the second half of November, the document is to be approved at least by the Government.

For his part, secretary of state at the Ministry of Finance Dorel Noroc presented the main fiscal and customs policy measures for 2021. These referred to the exemptions provided to private individuals, standardization of income tax rates, fiscal regime of dividends distributed to legal entities, fiscal and social regime of legal entities, diminution of cash in the economy, possibility of incorporating the road tax into excise duties on oil products and others.

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