Dumitru added that they had only succinct informal talks with Finance Ministry representatives on the new Tax Code draft, and that the Fiscal Council will draw up an opinion on the issue in the upcoming period.
According to the Tax Code draft, the government plans to cut the flat tax rate to 14% as of January 2019, from the current 16% and to lower the value added tax from 24% to 20% as of next year and to 9% on food items such as meat, fish, fruits and vegetables. The government wants to lower the VAT even further, to 18%, as of January 2018.
The government will also lower excise duties on fuel and alcohol and remove crude oil locally produced, coffee, jewels, furs and cars from the category of products subject to excise duties, and scrap tax on special constructions, among others.
The government also plans to eliminate the 16% income tax on dividend payments to companies’ shareholders as of January 1, 2016, in a move to avoid double taxation which is expected to crack down on tax evasion and limit the externalization of profits.
The fiscal relaxation measures in the new Tax Code draft will diminish budget collection by over RON37 billion in four years, but half of the sum will be recovered from the positive effects over economy, according to government estimations.