Romania Will Retain Major Tax Rates In 2010 Budget

by Ulrika Lomas, Tax-News.com, Brussels

07 January 2010

Romanian Prime Minister, Emil Boc has released details of the government’s fiscal plan for 2010, focused on increasing job prospects and supporting businesses, while maintaining funding to the public sector, in line with discussions with international organizations.

According to Boc, in order to support a strong economic recovery, Romania’s flat 16% rate on personal and corporate income tax will remain intact, along with the 19% value-added tax (VAT) rate.

He noted that unlike many other European Union (EU) states, Romania, in 2010, will be able to maintain the rates of its important taxes, and will avoid economic contraction.

The Prime Minister further claimed that the International Monetary Fund, European Commission, and World Bank’s upgraded estimation of 1.3% economic growth in Romania this year proves that decisions taken during 2009 were correct. Projections for the Romanian economy were upgraded recently from initial estimates of growth equal to 0.5% of GDP.

Commenting on the country’s fiscal position, Boc stated: “What we achieved in 2009 was right for Romania, despite the unpopularity of some of the measures. Measures proposed for 2010, will again not necessarily be the most popular but will give the trajectory of healthy economic growth over the coming years, so that we can aspire to a living standard comparable with that of EU states."

"We will be able to back the pension system so that any contributor can benefit from a pension in this country, and we want to make sure that wages will be paid, protected and furthermore, new jobs created.”

The government is to extend the tax exemption on reinvested profits for companies, and introduce a moratorium on social security contributions, despite proposed increases to minimum social pensions in line with inflation.

A draft budget is being considered by Romania’s parliament, comprehensive details of which will soon be released.

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