“It is not possible to introduce the progressive income taxation in the next two years because the database, namely the application used by ANAF, prevents its introduction,” Valcov told a press conference regarding the Fiscal Code and Fiscal Procedure Code.
The Government stipulated in its governing program early 2014 the introduction of progressive income taxation, with tax rates of 8%, 12% and 16%, if the fiscal-budget framework allowed it.
Romania’s draft Fiscal Code sets that the flat tax will be cut to 14% from the current 16% starting January 2019. The planned reduction is expected to reduce revenue collections to the state budget by RON4.8 billion in 2019, but it will also generate additional revenue of RON2.3 billion from the value added tax, social contributions, salary tax and from creating new jobs. The net budget impact is estimated at RON2.5 billion.