Finance Minister: Romania to keep the 16% flat taxation rate for individuals in 2015

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