Ruling coalition officials firmly denied Thursday any plans to increase the flat tax, but, the calculations behind these retractions are extremely real. Hiking the flat tax, along with cutting the VAT from 24% to 22%, would bring an additional RON8 billion to the state budget, the same amount the country’s Finance Ministry is set to lose this year in terms of budget revenues.
Economists say tax changes at this time, when the economy is still recovering after five years of crisis, would be a major hurdle to economic rebound.
Following multiple negative reactions, Prime Minister Victor Ponta said Thursday evening that he was not considering boosting the flat rate in 2014, but admitted he had asked Finance Minister Daniel Chitoiu to come up with solutions to boost revenues, which are on downward trend. In fact, the budget will be revised downwards at the end of October, Ponta said.
(English version by Daniela Stoican)