Fiscal resetting in Romania
Planned amendments to the Fiscal Code of Romania are currently subject to public review
Mihai Pelin, 06.07.2022, 14:00
The finance ministry made public the bill modifying the Fiscal Code of Romania, due to be endorsed by the government next week.
The planned amendments include increases of the tobacco and alcohol excises, of taxes on gambling revenues, a lower ceiling for tax facilities in the constructions sector, agriculture and the food industry, and scraps previous tax facilities for the hospitality industry, with operators in the sector set to return to a regular tax on turnover. All these measures are scheduled to take effect on August 1.
The document also includes provisions due to come into force as of January 2023, such as a raise on dividend taxes from 5% to 8% and a change in the criteria that define microenterprises by lowering the revenue ceiling from EUR 1 mln to EUR 500,000, with the microenterprise legally bound to have at least one employee.
Also, as of January 1, VAT will be raised from 5% to 9%, both for food and beverage deliveries and for restaurant and catering services, as well as for accommodation services. The bill also stipulates changes in property owners taxes.
On the other hand, governmental sources also mention a possible adjustment of pension benefits to the inflation rate, starting next year.
The draft amendments to the Fiscal Code were one of the topics discussed by president Klaus Iohannis in a recent press conference. He pointed out that a modernisation of the fiscal legislation was due, and added that he had discussed this with the Liberal PM Nicolae Ciucă and the relevant ministers. The president also emphasised that no taxes and charges were considered for regular people, but that the changes are related to situations that had not been regulated properly before:
Klaus Iohannis: “I have asked them to analyse things very carefully, to avoid putting additional burdens on regular people and not to discourage businesses, but instead to make changes that make things more transparent and fairer. Virtually, this would improve revenue collection to the state budget, and better collection means less tax evasion.”
Romania does not plan an austerity procedure at this time, the president also added, and explained that measures of that kind taken during the 2009 economic crisis failed to yield good results. He also warned that the government cannot earmark substantial funds for offsetting the rise in fuel prices at the expense of investments, which are still necessary.
Mr. Iohannis voiced satisfaction with the work of the government, and said the Cabinet members did their job well and solved a lot of problems. (AMP)
