The authorities may increase taxes in the next period, it is about canceling certain reduced VAT rates or exemption from taxes and contributions in various sectors. This was stated by the State Secretary of the Ministry of Finance, Alin Chitu.

Alin Chitu, State Secretary of the Ministry of FinancePhoto: Inquam Photos / George Călin

He specified that we will no longer reduce taxes in Romania.

When asked if taxes would increase, Chitu said:

“Yes, these are the tax costs that you find in country reports (from various international institutions – no). We have a list of all these tax costs. We know them. They can start from reduced VAT rates for certain sectors to exemptions from taxes and contributions for different sectors,” he said during the EY conference in Romania.

Asked if taxes would go up this year, he said: “I don’t think so this year.

“We have these structural deficits. Our budget is covered by current spending on pensions and social security, and we maintain this level of tax revenue. We will not be trusted by external creditors,” Alin Chitu also noted.

What else did the dignitary say:

  • We asked the World Bank for support in defining the following goals. The World Bank presented a draft report sometime in late December. We sent it to the European Commission for review, we sent it to the Fiscal Council. We will send it to the budget and finance committees in the House and Senate for possible questions and clarifications. Sometime in February, at the latest in March, let’s get a mandate from the Government to restrain the process of development of the tax system.
  • I will ask for a mandate to revise the Fiscal Code.

We will remind you that in 2023 there has already been an increase in taxation for various segments:

  • Tax on dividends this year has been increased from 5% to 8% for both individuals and legal entities.
  • From January 1, the preferential VAT rate will increase from 5% to 9% for restaurant and public catering services, as well as for hotel accommodation activities.
  • The VAT rate on soft drinks with added sugar (or other sweeteners or flavorings) will be 19%, not 9%, as it was until the end of last year.
  • From January 1, the fixed rate of 40% was abolished and the tax will be calculated from the gross income. That is, 6% of the tax will no longer be paid, but 10% of the amount under the contracts.