Tuesday, November 2, 2010

AP: IMF urges Romania not to change taxes

An International Monetary Fund official has urged the Romanian government not to change its tax system, weeks before the fund decides whether to grant the recession-mired country the next installment of a multibillion euro (dollar) loan.

IMF mission chief to Romania, Jeffrey Franks, says Monday the country needs stability, and not changes in its tax system.

He said this was particularly necessary after public sector wages were slashed by 25 percent, and the sales tax raised, as the government attempts to keep its budget deficit at 6.8 percent.

Romania took a euro20 billion loan from the IMF, the European Union and the World Bank last year, when its economy shrank by 7.1 percent. Franks expects the economy to decline by further 2 percent this year.

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