Ruling partners in Romania close to agreeing on tighter taxation
The Social Democratic Party (PSD) and the Liberal Party (PNL) still have to put the final touch on the amendments to the Fiscal Code, but they have already reached an agreement on several key elements.
Thus, the dividend tax will rise from 5% to 8%, the excise duty on tobacco and alcohol will increase, there will be a 40% tax levied on the revenues resulting from gambling, and a tax levied on the soda drinks containing sugar, according to prime minister Nicolae Ciuca speaking to the Liberal leadership, Adevarul reported.
The project still looks like a work in progress, subject to negotiations. It is a compromise likely rather to confirm both parties’ commitment to boosting the budget revenues than radical steps likely to make a difference.
Furthermore, the employees in agriculture and construction will not pay social security contributions for the first RON 1,000 (versus RON 3,000 currently).
The VAT charged to restaurants will rise from 5% to 9%, and the VAT levied on the food that contains sugar will rise from %% to 19%.
The Social Democrat leader Marcel Ciolacu expressed support for other measures, admitting at the same time that some of them (including the progressive taxation) will certainly not be enforced as of January 2023, when the other fiscal amendments are scheduled.
Thus, the Social Democrats would enforce deductibilities for the gross wages under RON 4,500 (EUR 900) so that no tax (0% income tax) would be levied on the RON 2,500 gross wages, according to News.ro.
Also, PSD would enforce progressive taxation for the “special” pensions above RON 9,000 (40%) and above RON 18,000 (90%), respectively.
A 40% income tax (versus the standard 10% rate) would be levied on the gross incomes exceeding the President’s gross wage in the public sector.
The Social Democrats would levy a 0.5% income special tax on the revenues of the companies with annual incomes exceeding EUR 100 mln, a provision firmly rejected by Liberals, though.
Actually, most of the provisions advocated by the Social Democrats on the top of those announced as agreed are rather for propaganda reasons and will not be part of the final text expected from the Government on June 28.