Individuals earning more than 360,000 lei a year will not qualify for the 24,000 lei personal exemption. This and other fiscal measures have been approved by the Government at its Friday meeting. 

Finance Minister Natalia Gavriliță said this measure means that individuals with higher incomes will contribute more to the budget. In 2018, the number of people who earned more than 360,000 lei a year was 4,891. Also, people earning more than 30,000 a month will pay an additional tax of 240 lei. The overall expected effect is 14 million lei in additional revenue.

Another approved measure concerns capital gain: income from selling capital assets will be taxed at the standard rates of 100% for companies and 50% for individuals (including people not formally engaged in entrepreneurial activity). People who sell homes in which they lived for at least 3 years will be exempt from capital gain tax.

Also, the deducted income tax is proposed to be set at 12%. 

The pollution tax will be hiked to 20%, a measure which the Ministry of Finance expects will stimulate companies to invest in recycling. 

As for the much-discussed cancellation of the halved value added tax rate enjoyed by the hospitality industry (it’s being restored to the standard 20%), Natalia Gavriliță cited IMF data showing that in the first 5 months of this year the VAT paid by 480 operators already reduced by 22 million lei.

Other measures include the cancellation of the exemption for the income estimated by indirect methods, the lifting of a moratorium introduced by the previous government on fiscal inspections, and the taxation of meal vouchers.

Overall, the proposed measures are estimated by the Ministry of Finance to bring in 1 billion lei in extra revenue to the State Budget.