The new platform of the Ponta III Government was recently made public. Some of the measures included in the document are related to increasing absorption of EU funds, stimulating private sector and creating jobs, a drop in VAT from the current 24 percent back to 19 percent, and gradual increase in the minimum wage.

“We simplify taxation and increase fiscal competitiveness of the business environment by: a) general reduction of taxation; b) expanding the tax base; c) simplifying the tax system; d) increasing budget revenue collection; e) reduction of tax evasion” reads the document.

The document also features:

• Returning to a VAT rate of 19 percent, if the fiscal and budgetary framework will allow it
• Keep the tax ceiling of 16 percent and introduce differentiated taxes on income from salaries, with fiscal deductibility: rates of eight percent, 12 percent, and 16 percent, which will be determined using income grids.
• Tax exemption for profit in reinvested buying machinery and technological equipment, should the fiscal and budgetary framework allow it
• Stimulation of the business environment within acceptable limits for macroeconomic stability, by simplifying procedures and cutting bureaucratic procedures for small businesses
• Extending the VAT reduction to other food products from 24 percent to 9 percent. We thus stimulate domestic production and reduce tax evasion in the food sector
• Reduction of the social security contributions (CAS) by 5 percentage points for employers, should the fiscal and budgetary framework allow it
• Reducing costs with bureaucracy and taxation, by canceling some tariffs for permits, authorizations and by simplifying the legislative framework.
• Acceleration of EU funds absorption by creating a central structure responsible for coordinating the management authorities, by simplifying and unifying the legislative framework
• Adopting a new law for SMEs, which is based on the transposition into the Romanian law of the European law on small businesses in Europe, the Small Business Act (SBA).
• Gradual increase in the minimum wage to RON 1,100 by 2016

Irina Popescu, irina.popescu@romania-insider.com

(photo source: gov.ro)