Romanian Govt. wants 10% tax on global household income and plans to hire 35,000 tax advisors

Romania’s Government has been working for two months to amend the Tax Code in order to introduce a new tax on global household income, according to finance minister Viorel Stefan. The Government also plans to hire some 35,000 tax advisors to help Romanians file their tax returns. Government officials say the new taxation system is based on the American model. The current flat tax on individual income will be reduced from 16% to 10% starting January 1, 2018, and this tax rate will apply to the global revenues of a household, the finance minister announced. The new tax will apply to “global revenues” regardless of their source. It will also allow taxpayers to deduct several expenses, the minister explained. However, revenues bellow RON 2,000 (EUR 442) per month will not be taxed. Stefan explained that the concept of household refers to a group of persons, regardless if they are relatives or not, who have a common asset. According to the minister, this tax doesn’t represent a new model, but one that had been in place until 2005. By introducing the tax on the global revenue tax payers will be able to deduct from the tax base some expenses such as the amounts paid for private pensions, health insurance, or the amounts paid for children’s education. The state will hire tax advisors who will help taxpayers organize and file their tax returns every year. One such advisor would help 200 households. The tax consultants will be paid by the state and will provide free consultancy to households, will draft the tax returns, but will also provide consultancy on how to invest money. They will also be in charge of actually paying the taxes for their assigned households. According to the finance minister, the tax advisor will be the “family doctor of the fiscal household.” He estimates that the state would need to hire some 35,000 tax advisors, who will be paid some RON 10,000 (EUR 2,200) per month. Thus, the state will spend almost EUR 1 billion per year to implement this new taxation system. The top 10 economic promises that helped the Social-Democrats win the elections in Romania editor@romania-insider.com