Romanian Govt. to enact by emergency ordinance temporary progressive taxation of pensions

A temporary progressive income tax will be levied on pensions for a period of five years, according to unofficial sources within the Government quoted by Profit.ro.

Pensions of up to RON 7,000 (EUR 1,500) per month will be taxed the standard 10% rate, the amount exceeding RON 7,000 will be taxed with a rate of 30% while whatever exceeds RON 10,000 per month will have a 50% tax applied, the sources detailed. The new system is to be approved by the Government by ordinance.

The Superior Council of Magistracy (CSM) has already criticized the Government’s plans to levy supplementary taxes on pensions (the comment referred to the special pensions, namely those not proportionally based to recipient’s past contributions). CSM argued that “it is a hidden form of eliminating them [the special pensions]”. The measures envisaged “are contrary to the principle of independence of justice, being unconstitutional,” claimed the magistrates, who announce that they would notify the international bodies and the Constitutional Court.

Under the form circulated this time, the progressive taxation would be levied to all pensions, irrespective of their nature [based on past contribution, or calculated under special grounds -- typically for judges, prosecutors, police officers, and military staff].

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