Romanian Social Democratic Party advocates for stricter tax regulations for multinational corporations and proposes a newly imposed revenue tax.
Romania's Social Democratic Party Proposes New Tax Measures
Romania's Social Democratic Party (PSD) has put forward a proposal for a new 0.5% turnover tax on companies that currently pay profit tax. This move aims to ensure that companies profiting in Romania pay taxes there, regardless of where the profits are made.
The tax reform is part of a broader fiscal consolidation effort in Romania, which includes increased VAT rates, higher excise duties, and banking taxes. The PSD's proposal is intended to help the country reduce its budget deficit and meet EU requirements for accessing recovery funds.
The PSD also seeks stricter regulations and taxation of profit-shifting practices by multinational companies. However, specific mechanisms for achieving this have not been disclosed yet.
PSD President Sorin Grindeanu has called for revisions to the initial fiscal package, focusing on changes to social contributions. He has expressed opposition to asking low and medium-income earners to bear the initial burden of health system contributions. Instead, he advocates for exemptions from paying contributions to the public health system for specific groups, including war veterans, former political prisoners, and mothers on parental leave.
The PSD is part of a ruling coalition in Romania, and Grindeanu has stated that the party could exit the coalition if its key proposals are not accepted. Prime Minister Ilie Bolojan has mentioned the second package of fiscal reforms, which is expected by the end of July and includes some of the PSD's demands.
It is worth noting that the new turnover tax proposal targets companies that currently pay profit tax, expanding the scope of turnover-based taxation beyond the current 1% turnover tax that only applies to companies with over EUR 50 million revenue reporting losses or paying very low profit tax.
The provision for exemptions for the mentioned groups has already partly been addressed, according to the text. The PSD's demands for stricter tax regulations and fairer taxation are part of ongoing fiscal reform negotiations within the ruling coalition. The proposed tax measures are part of a broader strategy to increase revenue without disproportionately impacting low-income earners.
Some of the PSD's demands are reportedly included in the second round or a third package still under preparation. Grindeanu has questioned the effectiveness of reducing the budget deficit by collecting health system contributions from war veterans and political prisoners.
In conclusion, the PSD's proposal for a new 0.5% turnover tax is a significant step towards ensuring tax equity and curbing profit-shifting practices by multinational companies in Romania. The proposed tax reform aligns with Romania’s effort to stabilize public finances and fulfill EU fiscal targets. However, details on how profit-shifting would be curbed remain forthcoming.
- The new tax proposal by Romania's Social Democratic Party (PSD), a significant step towards tax equity, falls under the umbrella of policy-and-legislation, shaping the political landscape of the country.
- The ongoing negotiations within the ruling coalition, involving the PSD's demands for stricter tax regulations and fairer taxation, are closely related to general news, especially concerning Romania's fiscal consolidation and efforts to meet EU requirements.
