The income tax imposed on private individuals will be reduced from 18% to 12%. The employer’s contribution to the state social insurance budget will be decreased from 23% to 18%, while the personal exemption form income tax will be raised to 24,000 lei. The planned measures were announced by Prime Minister Pavel Filip, the first deputy chairman of the Democratic Party, in the traditional press briefing after the party’s weekly meeting, IPN reports.
According to Pavel Filip, to fight tax evasion in the hotel, restaurant and cafe services sector, the VAT rate will be reduced from 20% to 10%. The companies working in this sector that have revenues lower than 1.2 million lei will pay an operational tax of 4%, while the others will have to pay an income tax of 12% and to mandatorily register as payers of VAT of 10%.
As to taxi services, the Premier said a special regime will be worked out for taxing cab drivers who have a salary lower than 10,000 lei a month. These will pay a fixed tax of 500 lei a month. The social and health insurance premiums will also be fixed, but the annual amount hasn’t been yet determined. The fines for illegalities committed by taxi drivers will be raised. These will have to issue a receipt or the clients can refuse to pay the fare.
Pavel Filip noted that the presence of undeclared financial resources and property in the national economy during many years is a problem. These could be declared voluntarily. An application will be submitted for financial resources and a tax of 3% of the sum will be levied to determine if the money is not ill-gotten gains. Those who held public posts after 2009 will be unable to benefit from this mechanism.
In support of the exporting business entities, the deadline for repatriating currency will be increased from two to three years and the fines for delays in repatriating the money will be decreased two times, from 0.1% to 0.05% a day. The fine for not repatriating the money by the set time limits will be reduced from 40% to 18%.
As regards the fines and penalties related to the national public budget that haven’t been paid by business entities for many years, these will be annulled on condition that the current taxes are paid by a particular date.
As to the pressure exerted by inspection bodies on the business community, the Premier said a series of offenses will be investigated only by prosecutes and only after the inspection bodies ascertain these. The subjects of economic offenses will be freed from liability if they eliminate the violation and pay double fines and damages.
Preventive arrest will be imposed in a limited way and with very clear rules. Searches will be carried out based on stricter rules. Inspection on the spot will be conducted only after the documents are examined in the office. The powers related to the investigation of economic offense of the Information and Security Service will be limited. Legal liability will be instituted for functionaries who do not obey the terms or groundlessly refuse to issue permissive documents.
Pavel Filip said the measures will help to fight the underground economy and the illegal payment of salaries and to raise the pensions, salaries and the contributions to the social insurance fund and the state budget.
