The Grey Economy Dropped to 25% of the GDP

The grey economy dropped to 25% of the GDP, and the rate of revenue collection to the budget was up by 3.2% as compared to 2002, says the National Authority for Control (NAC), one year after its founding.

The ratio of the grey economy dropped from 40% of the GDP in 1998 to 25% of the GDP currently, said yesterday Ionel Blanculescu, minister for the National Authority for Control.
"In view of Romania’s future EU accession and toughened up measures against tax evasion and fiscal frauds, we estimate a further drop of the grey economy to 15% of the GDP, which is the top limit for the EU countries," said Blanculescu.

During one year of collective work, the institutions under the authority of the NAC raised the ratio of revenue collection to the budget from 29.7% of the GDP in 2002, to 31.1% at present.
Estimates show that total budgetary revenues in the first half of 2004 are 56.4% higher than those collected during the same time last year.

Also, the NAC report shows that revenues from taxation of profit went up by 68.5% since 2003. This means in real terms that it went up from 18,574 billion lei (roughly 562 million dollars) in the first six months of 2003, to 31,302 billion lei (roughly 948 million dollars) in the first six months of 2004.
The National Fund for Social Security and Health made progress too in raising the revenues, from a monthly rate of 4,264 billion lei (129.2 million dollars) during the first five months of 2003, to a monthly rate of 5,402 billion lei (163.6 million dollars), over the same period this year.

The estimated tax evasion reached approximately two billion dollars last year, which means that the revenues could have been 13% higher, but the precise figure is hard to arrive at, said Blanculescu. He stated that the increased performance in tax collection was due in large extent to his institution being set up last year.