BUCHAREST (Romania), April 25 (SeeNews) – Romania should keep its current flat income tax as the administration, population and business are unprepared for such a major shift in fiscal policy, the American Chamber of Commerce in Romania, AmCham in Romania, said on Tuesday.
"In the context of the recent information in the media on the intention to introduce the global income tax, AmCham Romania hereby reiterates its firm support for maintaining the current flat tax that proved to be the most efficient fiscal policy for Romania’s economy," AmCham said in a press release.
The organisation expressed its deep concern regarding the introduction of major changes in the fiscal policy in a timeframe that does not allow enough time for proper consultations with all stakeholders, which is not in line with the commitment to observe the stability, predictability and transparency of the decision making process.
Romania's finance ministry said last week that as of next year all households will have to pay a 10% tax on their global income above a non-taxable income threshold, instead of the effective flat income tax rate of 16% for individuals, under a new Economic Code currently being developed. Taxable income will represent the total income received by the members of a household less a number of expense as household income below 2,000 lei ($473/442 euro) per month will not be taxed, according to the new legislation.
The income tax shall be paid twice a year in equal tranches and the statements must be filled out by fiscal consultants, according to the finance ministry draft.
"Given the incapacity of the current tax administration infrastructure to accommodate the flow and volume of data to be incurred by the proposed system, we consider that introducing a mechanism of such complexity and novelty that will pose difficulties to the population at large, must be avoided," AmCham further said.
At the same time, AmCham believes that the planned transfer of the payment obligations for the social contributions from the employer to the employee needs an integrated approach and thorough consultations as it carries significant changes of the fiscal framework and it impacts the taxation level of salaries.
AmCham Romania has over 400 members - U.S., international and Romanian companies, both large corporations and medium and small enterprises, which sustain some 250,000 jobs in Romania and invested in the country some $20 billion (18.3 billion euro) since 1993.
(1 euro=4.5250 lei)