A story of morons: the local taxes

IOANA POPA (Translated by Cosmin Ghidoveanu)
Ziarul BURSA #English Section / 8 ianuarie 2013

A story of morons: the local taxes

Citizens who woke up at 3 a.m, in the first days of 2013, to pay their taxes ahead of time so they could receive a discount, may have the surprise to see that they have nevertheless paid more than they should have.

Economist Cristina Chiriac said that the Ponta government had the obligation to issue an emergency ordinance which would amend the current Tax Code by December 31st, 2012, so that the mayors would know the levels of the taxes applicable starting with January 1st, 2013. "Some of the mayors opted not to wait for the amendment of the Tax Code, raising the local taxes, but others, who either had money in their local budgets, or didn't know how to construe the new fiscal regulations, chose to wait for the clarifications from the government. Currently in effect is the old Fiscal Code, which has not been amended by the Ordinance issued by the Ponta government in 2012, by which the local taxes are updated to match the level of inflation".

The scandal of the taxes has started since Sunday, when former prime minister Emil Boc, who is currently the mayor of Cluj, has asked the government and Victor Ponta to urgently issue a Government ordinance which would make it optional for local authorities to raise local taxes.

At the end of last year, the government has passed a decision concerning the updating of the local taxes with the rate of inflation over the last three years, namely their raising with 16.05%. The Government Ordinance was published in the Official Gazette on December 28th.

Prime minister Ponta has asked for the agenda of Friday's (January 4th) government meeting to include the Ordinance which establishes that it is the mayors who decide to adjust the local taxes, but he said that the deed will be published after president Băsescu will sign the law which enables the Government to issue Ordinances.

On Friday, Victor Ponta said that this law must be published in the Official Gazette before the Ordinance concerning local taxes and told the ministers that he had talks with the president on this matter, who assured him that he would sign the law in question on that very Friday.

But on Monday, January 7th, the Government has replied, in a response to the request of mayor Emil Boc to pass the ordinance which would allow the local authorities not to index taxes, that the Government ordinance could not be passed on January 5th, because president Băsescu passed the enabling law only after the government meeting took place.

Shortly after the statements of the Prime Minister, the Presidential Administration has asked the Romanian government, in a press release, to stay within the boundaries of decent statements, and not to blame third-party institutions for the failure to pass the decision concerning the amendment of local taxes.

The Presidency said: "The law to enable the government to issue ordinances was received by the Presidential Administration on December 24th, 2012. The Romanian president, according to article 77 of the Romanian Constitution, has 20 days available to review and pass a law, or to send it back for re-examination (basically, in this period, the Constitutional-Legislative Department of the Presidential Administration only had 2 days to conduct this analysis). Romanian president Traian Basescu passed this law on January 3rd, 2013, on the same day that he has personally informed prime minister Victor-Viorel Ponta about that. Besides, the Presidential Administration has issued a public press release on January 4th, 2013, concerning the passing of the law".

The Presidential Administration also said that it rigorously complies with the procedures and the provisions of the Constitution and that it will not violate them following public pressure created through statements or press releases.

Ponta: The president and the Government have acted constitutionally, when it comes to the Government Ordinance concerning local taxes

The government and the Romanian president alike have acted legally and constitutionally when it comes to the Government Ordinance the local taxes, PM Victor Ponta said yesterday at noon, and he mentioned that the only one who didn't was Emil Boc. He gave reassurances that the cohabitation agreement between the Government and the Presidency will not be broken.

Victor Ponta said: "The president has acted in a constitutional and legal manner by passing the enabling law on Friday. The government has acted legally and constitutionally, it couldn't pass simple ordinances before the law was passed. The only one who acted illegally, unconstitutionally, and stupidly is Mr. Boc, who has no excuse for not knowing the procedure. A former prime minister making such a stupid statement like the one he made on Sunday...Ask him why he didn't understand how it works".

He told Emil Boc to make sure he collects the taxes and he urged him to stop being "ridiculous": "Emil Boc should do his job and collect the taxes. If he doesn't want to, it's his problem, he will have to deal with the Court of Auditors. I know he is trying to change his political image, that there is infighting in the PDL, but he should stop being ridiculous".

On the fact that the Presidency has asked the Government to keep the statements "within the boundaries of decency", Victor Ponta replied: "Good God, when was I indecent?"

Boc: "Ponta was caught red-handed. He tried to pull the chestnuts out of the fire using the mayoralties"

The Mayor of Cluj-Napoca, Emil Boc, said that Prime Minister Victor Ponta is dodging the question when it comes to the Ordinance for the amendment of the Tax Code, "in a pure diversionist manner". Emil Boc said: "Victor Ponta has been caught red-handed and now it's a case of < < a thief complaining he's been robbed > >. He tried to pull the chestnuts out of the fire using the mayoralties. I am asking Ponta about the absence of the Emergency Government Ordinance for the amendment of the Tax Code and instead his answer is about why they didn't pass a simple ordinance, I ask him a question and he gives me an unrelated answer. That's where the diversion is. I imperatively ask him this week to pass a simple or emergency ordinance to amend the Fiscal Code and to eliminate the uncertainty for the local administrations". He said that the head of the Government knew very well the difference between an emergency ordinance and a simple one, as the former doesn't require an enabling law, "just the decision of the prime-minister and the document drafted by the Ministry of Finance".

Emil Boc said: "The supreme proof is the draft Government Emergency Ordinance available on the website of the Ministry of Finance since December 21st, 2012, and which no longer made it mandatory for the local authorities to index their local taxes by 16%. He could have passed the Government Emergency Ordinance on December 21st, December 27th, on January 4th and leave the local administrations decide on the taxes, not leave everybody confused. Lies don't make it very far. I think this is diversion, hypocrisy and incompetence, because I can't interpret in any other way what Ponta said so far, who is acting like he is not familiar with the provisions of the Constitution".

He expressed his regret that instead of admitting he was wrong, Victor Ponta was "attempting diversions such as < the Presidential Administration didn't sign the decree to pass the enabling law >, or < former Prime Minister Emil Boc, professor of constitutional law, doesn't know the law >".

"If Victor Ponta wanted to keep the promise he made on December 12th, 2012, to allow the mayors to decide by themselves whether to index the local taxes or not, he could just pass an Emergency Government Ordinance. Had he passed it before December 31st, he wouldn't have had to summon the Parliament in an extraordinary session, because the Parliament is considered to be in session until the end of December. Had he passed it after January 1st, he could just summon the Parliament in an extraordinary session, and at any rate, I understand that he will summon the Parliament to discuss the budget on January 20th. It's indifference, ignorance or the attempt to raise the local taxes by adjusting them to inflation using the mayors. The government would blame the mayors, the mayors would blame Ponta and no one would be the wiser", said Emil Boc.