NBR, Ministry of Finance and the excise tax

When the current government was installed I expressed my concern that with a Deputy Governor, in office, as Minister of Finance that the independence of the National Bank of Romania might be be in danger. Here is my opinion. Also here in Romanian.

Yesterday was a big day for the Romanian government. It is yesterday’s exchange rate from fixing that it would be used to calculate the excise taxes in Romania  Simply put the higher the exchange rate the more money the government receives from this tax :the exchange rate risk stays with the common man.

I will get back to this exchange rate risk the government pushes on us without any opportunity to eliminate it. What I want to talk about is the exchange rate. It so happens that yesterday’s exchange rate was 5% higher than a year ago.  Therefore just a simple depreciation fills the pockets of the Romanian government while implicitly increasing  taxes on the economy.

If I were running a conspiracy theory blog I would say that the NBR did not intervene to help the Romanian consumer because the current Ministry of Finance who is also the Deputy Governor asked for this favor. This way it could increase government spending in the next few months and help his party win elections in December this year. BUT this is not a conspiracy theory blog.

All I am saying is this: do not be offended if people ask about a possible deal between the NBR and the Ministry of Finance at the expense of the Romanian tax payer when you create  a situation which implies that such a deal is possible.

 

 

6 thoughts on “NBR, Ministry of Finance and the excise tax

  1. You could have called this blog post “The Good, the Bad and the Ugly”.

    The NBR has for the past years helped the MoF, applying double standards for the Ministry of Finance + the Banks financing them and private companies. Regarding the excise tax, It is odd how in the past few years everybody on the fx market gets nervous around this time of the year and the exchange rate pops up to high values.

      1. Well obviously the Good is the NBR since they protect us from the evil fire breathing demons who want to devalue the RON and wreak havoc on the Romanian economy (like Godzilla did in Japan or George Soros in the UK).

  2. Strugurescu ajuta cursul dar nu pentru prostul roman care-l plateste ci pentru alte entitati.Spuneti teoria conspiratiei daca vreti spuneti ca nu integ piata dar este o realitate.Chestiunea cu MF este subsecventa si in nici un caz contrarie intereselor entitatilor.

  3. It’s not a “conspiracy theory” when it’s a FACT. The NBR has to do, sometimes what the Government asks, otherwise it would not be able to do whatever it wants in the rest of the time.

    If the Government wasn’t actually a thief it could have decided to set the average exchange rate for 2-3 months as a base for determining the excise rate.

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