Romanian president challenges tax amnesty law in Constitutional Court

Romanian president Klaus Iohannis has submitted a notification of unconstitutionality to the Constitutional Court regarding a controversial law approving Government Emergency Ordinance OUG 107/2024, which outlines fiscal-budgetary measures for addressing budgetary receivables and Romania's general consolidated budget deficit for 2024. The Presidential Administration announced the submission on Friday, December 20.

The fiscal amnesty brought RON 5.8 billion (EUR 1.2 billion) to the state budget, according to data collected by Profit.ro as of December 20, compared to RON 9 billion initially estimated.

The fiscal amnesty scheme envisages costs as well, in the form of a 3% bonus for taxpayers meeting their payment deadlines in 2025. The allowance, estimated to cost the budget some RON 1.1 billion in 2025, was enhanced to 5% by the lawmakers – which brings the negative impact on the budget to RON 1.8 billion.

The law in question includes provisions for a tax amnesty targeting interest, penalties, and other related accessories tied to main budgetary obligations outstanding as of August 31, 2024. The amnesty would apply to natural and legal persons who fulfilled their primary tax obligations and submitted cancellation requests by November 25, 2024.

Additionally, the legislation offers partial cancellations of principal tax obligations and associated penalties for individual debtors, with reductions of 50% or 25%, depending on eligibility criteria. These measures are part of broader efforts to manage Romania's fiscal challenges but have sparked significant debate regarding their constitutionality and fairness.

(Photo source: Presidency.ro)