Romanian government unveils new fiscal measures, taxes to tackle deficit
Romania’s Ministry of Finance recently published a draft law containing new fiscal and budgetary measures for which the government intends to assume responsibility in the Parliament. The changes are aimed at increasing tax collection and bringing down the budget deficit.
The bill includes a 1% tax on the turnover of small and medium-sized enterprises (SMEs) with revenues of up to EUR 60,000 per year, and a 3% tax if revenues exceed this amount. As such, the government abandoned the 16% tax on profits if the profitability rate exceeds 30%. The increased tax rates for micro-enterprises apply starting from January 1, 2024, according to Digi24.
Larger companies with revenues exceeding EUR 50 million will pay a minimum tax of 1% on turnover. Banks will also pay a 1% tax on turnover.
The exemption from tax in the IT, construction, agriculture, and food industry sectors will only be maintained for gross incomes of RON 10,000 (EUR 2,000).
Additionally, the legislation outlines a reduction in the total number of managerial positions, conditions the granting of holiday vouchers on salary levels, and limits the level of bonuses for public institutions.
There will be a reduction of secretary of state, state counselor, undersecretary of state, vice-president, and similar positions by at least 30% and a reduction of councilor positions by 50%. Additionally, the government will adopt a limitation of hazardous or harmful condition bonuses and will restrict mobile phone purchases and expenditures for public entities and state-owned companies.
Excise taxes on alcohol and tobacco will also be increased, and a special tax will be introduced on high-value immovable and movable assets.
The government also planned a limitation of tax incentives for the IT sector until December 31, 2028, and the introduction of an income threshold for tax exemption, so that incomes above RON 10,000 will not benefit from tax incentives. Workers in the construction and food industry sectors will pay contributions to social security under the draft law.
VAT will also increase from 5% to 9% for various goods and services, including social housing, high-quality food delivery, solar panels, and more. A standard VAT rate will be applied to beer without alcohol and sugary foods with a sugar content of at least 10g/100g. A sugar tax is introduced for certain non-alcoholic beverages based on sugar content.
A special tax will be imposed on individuals who own real estate exceeding EUR 500,000 and cars exceeding EUR 75,000. The tax is payable over a 5-year period.
(Photo source: Gov.ro)