CAS (the social insurance contribution) might be 5% lower starting with next year, as measure included in the fiscal reform. Romanian prime minister Calin Popescu Tariceanu made this announcement yesterday. He said he had talked about it with several Romanian and foreign experts who opined that the CAS should become lower. Mediafax quotes Tariceanu saying that the cut on social contribution had also been debated by PNL (the National Liberal Party) members. The PM mentioned: "The 2% cut would not be enough for getting new jobs and providing supplementary income to the budget. There is need of a shock measure and we have considered the idea to make the CAS 5% lower." Rompres quotes Tariceanu saying at the end of last week that the 49,5% social insurance rate in Romania was a very high one. "This rate discourages employers to hire people officially. Unfortunately, black market labor is still widely practiced in Romania. We want to bring this to surface by cut on the CAS". Analysts opine that the CAS cut to follow next year might be the reason why there has lately been talk about VAT (the value added tax) raise. Finance Minister Ionut Popescu announced last week that it was likely that there should follow 2-3% raise of the VAT next year. But coalition leaders and the Finance Ministry have presently explained this was a hypothesis to be used for the increase of budget income. At the end of last week, prime minister Calin Popescu Tariceanu was asked if the VAT was to reach 22%. He answered: "We are talking about a topic that doesn't exist". IMF (the International Monetary Fund) experts have also asked for income increase. They have recently analyzed in Bucharest the precautionary stand-by agreement with Romania, reached in the summer of 2004. (C.S., A.G.C.)