Reuters logo
UPDATE 1-Romania's PM scraps plan to tax companies' turnover
July 17, 2017 / 1:30 PM / 2 months ago

UPDATE 1-Romania's PM scraps plan to tax companies' turnover

* Planned tax drew wide criticism by Romanian firms

* Solidarity tax for big earners still under assessment (Adds details)

BUCHAREST, July 17 (Reuters) - Romanian Prime Minister Mihai Tudose said on Monday his leftist-led government had scrapped a plan to tax companies’ turnover.

It came after sharply negative market reaction and criticism from President Klaus Iohannis as well as local and foreign investors.

In late June, the ruling coalition had announced changes to major taxes due in 2018, including replacing a corporate flat tax of 16 percent on profit with a progressive tax on turnover.

The tax plans and a quickly ditched idea to end a mandatory, multi-billion private pension scheme for those under 35, beat down stocks and the leu currency.

“We will not enforce ... this tax,” Tudose told reporters after a meeting of the ruling coalition. “You may consider this subject closed.”

But he added there were large companies that “have been reporting serenely they didn’t have a profit for decades,” and that the tax authority needed to better monitor tax dodgers.

Tudose said the finance ministry was still assessing a planned solidarity tax for top earners.

Other tax measures the government was considering in June included a cut in income tax to 10 percent, and a move to cut social security contributions by 4.25 percentage points to 35 percent and have only workers, not their employers pay them. It was unclear when or how these changes would come in.

Tudose reiterated the government’s committment to keep the 2017 budget deficit at or under the European Union ceiling of 3 percent of GDP.

Loose fiscal plans have worried the European Commission and the International Monetary Fund over missing budget targets. The Commission expects Romania to run the EU’s largest deficits this year and next at around 3.9 percent.

The leu was flat against the euro on Monday. (Reporting by Radu Marinas and Luiza Ilie)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below