Romania’s flat taxation rate of 16 percent on income earned by individuals will most likely be kept in 2015, said Finance Minister Ioana Petrescu in a press conference. There is no intention to change the flat rate for companies, either, the minister added.

“What I can tell you for sure at this moment is that we will maintain the flat taxation rate for companies. I know that in the governing program there is this wish to introduce progressive tax rate (for income of the individuals – e.n.), but I sincerely don't think this can be achieved in 2015, because there are several technical issues that can’t be solved in less than a year,” Petrescu declared in a press conference, according to Hotnews.ro.

The fiscal and budget strategy for 2014-2016, which was approved by the Government and by the parliament in 2013, mentions that the state wishes to introduce a differentiated taxation system for individual income, with three quotas: 8 percent, 12 percent and 16 percent, which will be applied to different income levels.

The Government also wants to reduce the social insurance contributions (CAS) by 5 percentage points. Employers currently pay CAS representing 20.8 percent of an employee’s gross salary, while employees pay 10.5 percent.

editor@romania-insider.com