Minister of Finance Marcel Bolosh did not hide that from 2025 tax changes will be so tough that new taxes from 2024 will seem easy.

Some people from the business community occasionally communicate with the authorities on this topic and know, by and large, what will happen next.

Higher taxes for micro-enterprises

“In the first projects, there was a mass reform of micro-enterprises. The story is not over. The Ministry of Finance has promised to return to this topic,” said Alex Milcev, Head of Fiscal and Legal Assistance at EY Romania.

It is about what is considered “abuse of micro-enterprises for tax purposes”. That is, there are people who create micro-enterprises in order not to pay slightly higher taxes as employees.

“ANAF does not have the inspectors and the authority to monitor the tens of thousands of micro-enterprises (who would practice it) to check whether they are entrepreneurs or just workers with a different name,” he said.

According to him, he will return with such an idea micro-enterprises must pay 16% income tax if they have a profitability of more than 30%.

Version I of the draft fiscal measures contained the following provision:“if during the financial year a micro-enterprise achieves an income of more than 300,000 lei and a profit margin of more than 30%, calculated as the ratio between net profit and total income recorded in accordance with the applicable accounting regulations, it has to pay income tax starting from the quarter in which it is registered this case”.

Alex Miltsev hinted that there is even a possibility to return with changes in this regard this year or in 2024.

Minister Bolosh said that there will be no changes in 2023 and 2024, but from 2025. So then, most likely, we will see such a change.

2025 – real estate tax increase

“The world has forgotten, but we have an elephant in the living room that appeared in 2022 (according to OG 16/2022): the reform of local taxes. It is about the reform of land, apartments, houses and cars,” Miltsev explained.

In the summer of 2022, he made a lot of noise. It will be applied from 2025.

“That is, not in the election year, but in the next year,” says Alex Miltsev.

According to him, there are two important stages at which changes occur:

1. The minimum rates are increasing. There are certain percentages that apply.

2. The base will be recreated. Now there are some tables in the Fiscal Code. If you buy a category A house in the center of Bucharest, you will get some ridiculous prices. Does not meet market value. In essence, the market value will be redefined. The Union of Notaries will provide a new grid that will theoretically be close to the market value.

“The processing of basic and percentage quotas will give more money at the disposal of local authorities. That is, the central administration should dispose of more funds from collected taxes,” said the representative of EY Romania.

Adrian Vascu, senior partner of Veridio and former president of ANEVAR, made some calculations in the initial version of Decree 16/2022 (subsequently the application deadline was extended to 2025).

Thus, taxes on buildings will increase by 2 times in Bucharest, and by more than 3 times on a house in Cluj.

Probability of VAT increase to 21-22%

“If the tax package does not collect what is needed and we return to the negotiating table with the European Commission, I think that the VAT increase will not disappear as a discussion (from 19% to 21-22%). This remains as plan B. Let’s see what the future will bring us,” said Alex Miltsev.

According to him, the VAT increase “is a nuclear red button”.

“With a pen, the financial equation can change from month to month. This is a significant political cost if it is introduced next year (in 2024). That’s why we don’t talk about him,” said the representative of EY Romania.

So we’ll probably see something similar in 2025.

Bolosh says that a major tax reform will take place from 2025

We remind you that the Minister of Finance, Marcel Bolosh, announced that from 2025 there will be a tax reform and that we will “skip the Law on Fiscal-Budgetary Measures”, i.e. Law 296/2023, for which the Çolaku government took responsibility: an avalanche of new taxes from 2024 .

“These measures are transitional to the real tax reform, which we will probably have in 2025. Of course, changes in 2024 are out of the question, at least at the moment. Not even for 2023,” said Marcel Bolosh.

• “Measures from 2025 will be sufficient, as shown by the commitments made through the PNRR. Know that we will pass the Law on Fiscal-Budgetary Measures”

“The impact of the minimum turnover tax is estimated at almost 5 billion lei. This is an important amount for the state budget and a transitional tax,” explained the Minister of Finance.

What is the reason for the fiscal reform in 2025: new pensions and salaries of state employees

“We rely on fiscal reform, which is an important milestone in 2025. Significant financial resources for the measures of the general pension legislation will come from the new fiscal reform,” Bolos said during a conference organized by CursDeGuvernare.ro.

It’s understandable, he says, “that the foundations are laid for consistent fiscal reform that supports the commitments we made through both the Pensions Act and the Single Wage Act.”.

“These are laws with a consistent impact on the budget, and they require stable financial resources”– said Bolos.