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Romania's PM says switch to progressive tax rate not on govt agenda

Romania's PM says switch to progressive tax rate not on govt agenda Romanian PM Nicolae Ciuca source: gov.ro

BUCHAREST (Romania), May 20 (SeeNews) - Romania's prime minister Nicolae Ciuca, who is leader of the National Liberal Party, PNL, said on Friday that the government is not discussing a switch to a progressive tax rate, dismissing comments by his party's partners in the ruling coalition.

"PNL continues to support the flat tax rate, we do not support the introduction of new taxes and duties," Ciuca said during a live-streamed press conference.

Ciuca's statement comes after Marcel Ciolacu, chairman of the Social Democratic Party (PSD) which is part of the governing coalition, and labour minister Marius Budai called for the introduction of a progressive tax rate for all types of income.

On Wednesday, Ciuca said that the government does not plan to raise any taxes this year but the fiscal policies will be revised, adding that he has tasked the finance ministry with drafting proposals to improve the country's fiscal policies in two weeks.

Romania currently has a 16% income tax, but some professional groups such as employees in IT and construction, and agricultural workers are exempt from it. Pensioners receiving more than 2,000 lei pay 10% tax.

Companies with a turnover higher than 1 million euro ($1.05 million) pay a 16% tax on their profits. Firms with no employees with a turnover lower than 1 million euro pay a 3% tax on profit, while those with employees pay 1%.

Romania's coalition government comprises the PNL, PSD and the Democratic Alliance of Hungarians (UDMR) led by liberal Nicolae Ciuca.

(1 euro=4.9477)

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