Romanian Government’s New Tax Measures: Aiming for Fair Practices and Economic Reform

Romanian Government’s New Tax Measures: Aiming for Fair Practices and Economic Reform

A Push for Financial Equity

The Romanian government, under the leadership of Marcel Ciolacu, has taken the bold step of assuming responsibility for a new tax and budgetary measures project. This initiative has been met with considerable resistance from the business community. The primary objective of the project is to establish fair tax practices that ensure everyone pays taxes proportionate to their income. Ciolacu highlighted the unfairness of situations where millionaires pay taxes equivalent to those earning minimum wage. He also pointed out instances where businesses with substantial profits in the country evade taxation.

Ending Automatic Bonuses and Increasing Bank Taxation

The proposed legislation also aims to put an end to blanket entitlements to large bonuses simply for being present at work. Despite protests from members of parliament, particularly those from USR and AUR, the government advanced with the bill. An important amendment accepted was related to the taxation percentage of banks on their turnover. The percentage remained at 2% instead of the proposed 1%. Following this, senators and deputies have the option to submit a motion of censure. If this motion does not pass, the law is considered adopted. The USR, however, announced its intention to challenge the measures in the Constitutional Court.

Budgetary Reforms and Penalties for Tax Evasion

In addition to the new tax measures, the government also plans to reduce waste in the budget. High-income public sector employees will face greater restraint, while employees with lower wages will continue to receive vouchers and other income support measures. Several high-ranking positions will be eliminated, and spending limits will be introduced with stricter controls for exceeding these limits. The law also plans to significantly increase penalties and confiscate goods resulting from tax evasion. Illicitly gained wealth will be taxed at 70%. However, this does not imply the taxation of money from weddings or baptisms. The 70% tax applies to those who have not accurately paid their taxes, committed tax evasion, or stolen health or pension funds.

A Broader Reform and a Stronger Romania

Ciolacu concluded that the new measures have ended privileges, exceptions, and the ease of making money from tax evasion. Everyone will now pay according to their income, and those who do not comply will face penalties. The government is at the beginning of a broader reform and is determined to build a stronger Romania. This commitment to financial equity and economic reform could serve as an example for other nations struggling with similar issues of tax evasion and economic disparity.