President Klaus Iohannis signed into law a package of tax measures that increase taxes. They are also canceling a number of financial benefits for IT, agriculture, food industry and construction.
The Romanian government believes that tax increases and budget cuts were EU conditions for providing Romania with funds for post-pandemic recovery.
The country must submit to EU pressure so that more than 29 billion euros allocated by Brussels for the country’s Recovery and Resilience Plan can be transferred to Bucharest in full.
However, the European Commission did not oblige Romania to take serious measures to reduce the budget deficit or to reduce expenses.
With the help of innovations, the government tried to get additional funds for the budget by further taxing the private sector, instead of reducing the expenses of the state apparatus and refraining from raising the salaries of civil servants.
The budget deficit at the end of September reached more than 11.2 billion euros. Government spending is also on the rise and is now 14% higher than in 2022.
The new tax measures mean that micro-enterprises will pay a tax of 1% of turnover on revenues of up to €60,000 per year and 3% if revenues exceed this amount.
The government abolished the 16 percent income tax if the rate of return exceeds 30 percent. Companies with a turnover of more than 50 million euros will pay a minimum tax of 1% of the turnover. In 2024 and 2025, banks will pay an additional 2% sales tax, and in 2026 it will return to 1%. Oil and gas companies with a turnover of more than 50 million euros will pay an additional tax of 0.5% of the turnover