The Government has decided recently that the monthly share transferred to local authorities from income taxes will be reduced by 5.5 percentage points, from 77% to 71.5%, and earnings from taxes on pension income will go to the state budget in their entirety.
According to the amendment agreed on by the ruling coalition, the monthly share allotted to local authorities from income taxes will still be cut by 5.5 percentage points, from 77% to 71.5%, but the reduction will be distributed differently. The law will guarantee more funds for communes, cities and counties, while revenues resulted from balancing local budgets will be lower.
Currently, the 77% share is transferred to the local budgets of communes, towns and cities where income tax payers carry out their activity (44%), to the county’s local budget (12%) and into a separate account, opened for the county public finance departments with the county seat treasury, in order to balance the local budgets of the communes, towns and cities, as well as the county’s budget (21%).
Ovidiu Gant, MP with the Democratic Forum of Germans in Romania, told MEDIAFAX that, after the 77% share is reduced, the share destined for communes, towns and cities will be cut by 2.25% (not by 3.5% as stated in the initial format of the draft ordinance) the share for counties will be reduced by 0.75% (instead of 1%) and the sums destined to balance local budgets will be cut by 2.25% (instead of 1%).