Romanian ruling coalition plans tax overhaul from 2018

Reuters News
Posted: Jun 29, 2017 3:12 AM

BUCHAREST (Reuters) - Romania’s ruling Social Democrats plan to replace a flat 16 percent corporate tax on profit with a multi-leveled tax on turnover from 2018, as well as introduce "a solidarity contribution," a revised governing program showed.

Designated Prime Minister Mihai Tudose will ask for parliament’s vote of confidence later on Thursday, which he is likely to receive given the comfortable parliamentary majority held by the ruling Social Democrat Party (PSD) and their junior partner ALDE.

The turnover tax, solidarity contribution and an additional tax on products with a negative health impact are new measures compared with the governing program presented in December. So is postponing a 1 percentage point value added tax cut to 18 percent by one year to 2019.

Other measures, such as cutting the income tax to 10 percent from the current 16 percent, cutting social security contributions and shifting their burden solely on workers, not their employers have been carried over from the initial version of the program.

The government also aims to raise pensions and minimum wage, as well as introduce a slew of smaller tax cuts.

(Reporting by Luiza Ilie)