Taxes and Duties in 2014

The government of Romania approved the second budget revision this year.

Roxana Vasile, 31.10.2013, 19:23

The government of Romania approved the second budget revision this year. Although the funds for most ministries and public institutions have been cut, the cabinet promises pensions, salaries and social services will not be affected.

Although the budget revision left the Labour Ministry with less money, until the end of this year all pensions, salaries, unemployment benefits and other social services will be covered. As for the public sector salary raises in 2014, Labour Minister Mariana Campeanu says resident physicians, secondary school teachers and social assistants should benefit from higher raises. As Finance Minister Daniel Chitoiu explained, it all depends on the revenues collected to the state budget in the final part of the year:

Daniel Chitoiu: “We hope the economy will recover at the end of this year. We target an increase in revenues, thanks to the — hopefully – higher receipts from the farming tax, which as you know has been introduced this year and the deadlines for payment are October and December. We also hope for additional revenues coming from the deregulation of natural gas prices.”

The government also announced that in order to narrow the budget deficit, it is considering a broadening of the taxable incomes, but employers fear this might entail chain bankruptcies. Here is Cristian Parvan, secretary general of the Romanian Businessmen Association:

Cristian Parvan: “If you increase the tax rate when all other countries lower it, precisely in order to support the business environment as much as possible and to keep it viable and competitive, what we will probably see is businesses closed, disinvestments and, naturally, higher unemployment.”

Instead, businessmen propose a change of the economic model on which the Romanian economy is based. They say the economic structure should be improved, so as to be able to generate higher turnover and profit margins, which would lead to more revenues from taxes and charges.