The draft Law on Fiscal Budgetary Measures, which foresees several tax increases and the elimination of certain tax benefits to ensure Romania’s long-term fiscal sustainability, was published by the Finance Ministry on Tuesday.
Romania is currently under the EU’s Excessive Deficit Procedure with a budget deficit that has increased more than forecast. The authorities expect the bill to have a positive financial impact of more than RON 22.9 billion (€4.6 billion) over the next five years.
From next year, the government will introduce a minimum sales tax of 1% for companies with a turnover of more than €50 million.
An additional tax for banks will also be introduced at 1% of their turnover.
The threshold for qualifying as a micro-enterprise will be lowered from €500,000 to €60,000.
For micro-enterprises, the bill provides for two tax rates, 1% and 3%, depending on income and business activity.
Facilities for IT and construction workers will be abolished, and VAT will be increased on some goods and services.
The bill also includes measures to reduce spending by institutions and public authorities.
“Depending on the budgetary impact of these fiscal measures and the trajectory of Romania’s fiscal sustainability”, adjustments to these measures could be considered, Finance Minister Marcel Boloș said on Tuesday.
Boloș said there was no risk of Romania exceeding a deficit of 5.5% of GDP.
Energy suppliers and distributors have expressed concern that these tax increases could seriously jeopardise their ability to finance the price cap schemes.
The government will take responsibility for the administrative reform, a procedure that allows the law to be passed without amendments from Parliament.
USR leader Cătălin Drulă declared his party’s intention to table a no-confidence motion following discussions “with all democratic forces in Parliament”. However, the PSD and PNL have a comfortable parliamentary majority of 276 seats.
The leader of the Democratic Union of Romania (UDMR), Kelemen Hunor, said on Tuesday that there were “many improvisations” in the package of fiscal measures. “At the moment, I have the impression that this coalition has no idea where it wants to go.
Dacian Cioloș, MEP and former prime minister, criticised the fiscal measures, claiming that Marcel Ciolacu was “creating a series of illusions”. “What the PSD leader is doing is a damage control strategy to keep him alive until next year’s elections.
(Cătălina Mihai, Sebastian Rotaru | Euractiv.ro)
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