Government approves fiscal policy for 2011

The Government on Saturday approved the 2011 Fiscal Policy Bill, forwarding it to Parliament for adoption, Info-Prim Neo reports. Among the fiscal policy provisions that remained the same as in 2010 are the two progressive tax rates of 7% and 18% on individual income; the same amounts of personal exemptions; and the zero-tax rate on corporate income. Presenting the novelties of the 2011 fiscal policy, Finance Minister Veaceslav Negruta mentioned the 50% rise in the excises on distilled beverages and cigarettes, a measure intended both as a deterrent and a source of higher revenues. The document also removes the capping of local taxes and allows local authorities to determine their size. Another new measure allows the fiscal authorities to supervise foreclosure proceedings in cases where the state acts as a creditor. The next stage of reforming the property taxation system will have to be postponed because of the failure to appraise land for taxation purposes. It is proposed to introduce indirect methods of evaluating the income tax liabilities of companies and individuals. This measure sparked disagreements, however Minister Negruta said this would not be introduced this year, but in 2012, until which the necessary legal framework needed to be created. During debates on the Fiscal Policy Bill several dissenting opinions were expressed, including on the decision to remove the capping of local taxes, the introduction of a special motor tax and some customs duties. The Parliament will now have the final say on these issues.