The Impact of Fiscal Policy on Rural Economic Development in Romania

Abstract

Agriculture played a major role in the development of society since old times. The new paradigm of sustainable growth emphasizes the role of agriculture in economic growth, in ensuring food security, in poverty reduction, in the reduction of income disparities, in the development of the rural area and environmental protection. Fiscal policy is the means by which the government of a country interferes within the economy to stimulate or soothe its growth. Because the application of tax policy affects consumer demand of the society, it is considered that the fiscal policy operates on the market of goods and services units. Romanian Government's vision fiscal policy is focused on ensuring a stimulating role of taxes in order to increase the economic growth, to fiscal consolidation and to development and strengthening the middle class. The purpose of this article is to identify and highlight the impact of fiscal policy on sustainable rural economic development of Romania, in the context of Romanian rural economy realities and needs of the economic and social environment to become competitive on the European market. In order to reach our objective, we have used fundamental research methods consisting in reading of the specialized literature in this field and some articles and studies covering this topic. One of the most important decisions to make is that individual entities become legal entities with legal personality. There are necessary internal and external financing in agriculture based on investment (investment projects), involving agricultural companies and agricultural associations (not individuals bodies). Last but not least, we appreciate that the taxation of agricultural incomes is still a necessity, given the principle of universality tax, leaving it to the experts to determine the dimensions of income rules.