Romania reportedly promises S&P to replace “greed tax”

Romania’s finance minister Eugen Teodorovici sent a letter to the rating agency S&P ensuring that the Government would replace the so-called “greed tax” enacted through emergency ordinance (OUG) 114/2018 with a flat tax on certain banking assets, Economica.net informed publishing the leaked letter.

Quoted by Ziarul Financiar daily, Teodorovici confirmed that the “greed tax” would be amended, but added that the talks with local banks are still underway.

The “greed tax”, as enacted under OUG 114 is a tax on financial assets, proportional to the interbank money market (ROBOR) for ROBOR rates above a certain threshold (2%). This tax, among others, made S&P consider revising Romania’s sovereign outlook to negative from neutral currently.

The minister suggested in the letter that he was aware of the rating company's concerns. He also explained that the new tax would be levied on a yearly basis, will be fixed and will only target specific categories of assets (not specified in the letter).

S&P has recently confirmed Romania's debt rating, but it has accepted, at the request of the Government, to postpone the publication of the outlook to analyze Romania's appeal.

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