Chamber of Deputies passes the bill on the 5 pct cut in CAS

The members of the Chamber of Deputies rejected the President’s request for re-examination of the draft law on the CAS decrease.  The bill was subsequently passed in its initial form by 307 votes to seven, with five abstentions, according to Agerpres.

The Chamber of Deputies is the decisional chamber in this case.

On August 25, the Senate, convened in an extraordinary session for the evaluation of the request for re-examination submitted by Traian Basescu, also rejected his call and adopted the draft law without any amendments to it.

Talks preceding today’s vote were attended by Ioana Maria Petrescu, Minister of Finance, who reassured that Romania is prepared to introduce this fiscal measure even this year and asked the MPs to pass the bill. All the groups within the Parliament announced that support this project, recognizing unanimously that the five percentage point cut in employers' social security contribution rates is the most important fiscal measure in recent years.

As the Government has previously announced, the law should come into force on October 1, 2014.

The decrease by 5 percent of the CAS should have been introduced in June 2014, but the measure was deferred until October, Prime Minister Victor Ponta announcing that it will come into force although the foreign partners, the IMF and the EU Commission have not approved the fiscal measure. Provided the CAS will be reduced, the Ministry of Finance anticipates a deficit of some 850 million lei for the final quarter of the year which shall be covered by the existing surplus. However, President Traian Basescu declared that under the current circumstances, the measure is not feasible and will increase the budget deficit, so on July 25 he sent the related bill to the Parliament for re-examination.