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IMF Shakes Finger At Romanian Tax Amendment Proposals

The International Monetary Fund analyzes all proposals that aim at changing taxes, but a change in the fiscal system may prove to be dangerous after some very difficult measures were implemented, said Jeffrey Franks, head of the IMF's mission to Bucharest.
IMF Shakes Finger At Romanian Tax Amendment Proposals
Georgiana Lupu
22 oct. 2010, 18:40, English

However, Franks said the IMF will carefully analyze all options to change the taxation system.

Romanian parliament has recently adopted a bill cutting to 5% from 24% the value added tax level for staple food. Lawmakers also adopted an amendment to the Tax Code that exempts small pensions from a 16% income tax.

On the other hand, the ruling Democrat Liberals want to cut the flat tax rate applied on corporate profits and personal income from its current level of 16% and reduce the social contributions.

The IMF is currently reviewing Romania’s progress under the terms of a EUR13 billion agreement signed last year.

In 2010, Romanian government raised the VAT level by 5 percentage points to 24% and cut the public salaries by 25% in order to keep the budget deficit at levels agreed with the IMF.