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Romanian Social-Democrats Call For Minimum Rev Tax Annullment

Romania’s Social Democratic Party PSD proposed the elimination of the minimum tax as of September 1, the party’s spokesperson Bogdan Niculescu Duvaz announced Monday at the end of PSD’s Standing Bureau meeting.
Romanian Social-Democrats Call For Minimum Rev Tax Annullment
13 iul. 2009, 19:20, English

Duvaz said Monday that PSD wants to ask this week the Democrat Liberal Party, or PDL, to set up a firm date to eliminate the minimum tax. The two parties form the ruling coalition.
 
Eliminating the minimum yearly tax on revenue as of September 1, 2009 was one of the measures included in a Plan of anti-crisis actions proposed by PSD early July.
 
After PSD announced this conclusion, the party wanted to specify a clear timing to annul the tax, Duvaz added.
 
Thus, PSD proposed a one month and a half period until eliminating the minimum tax, so that the Finance Ministry might be able to make all the necessary changes and the taxpayers would be warned about them, Duvaz also said.
 
PSD deems this tax was totally unproductive for both the state budget and the country’s economy, as it led to more problems for the small- and medium-sized companies.
 
Asked about the future of the companies that had been forced to cease their activity because of the minimum tax, Duvaz said that, if the minimum tax is eliminated, the situation will be discussed at drawing up the normative act eliminating it.
 
Last week, the Economy Minister Adriean Videanu, a PDL leader, said he sees the government’s introduction of the minimum tax as an error, as the fiscal policy should not only have a collecting role, but should also be a stimulus for the economy.
 
According to a study conducted by the finance ministry, 102,000 companies that reported an average turnover of EUR200 a month in 2008 might stop their activity after the introduction of the minimum tax, while total revenues until 2012 are estimated at 4.2 billion lei (EUR1=RON4.2243).
 
According to a government decision, starting with May 1, companies have to pay an annual minimum tax based on their revenues. Thus, a company will pay a RON2,200 tax if its total revenues do not exceed RON52,000 in an year, while the maximum ceiling was set at RON43,000 tax for revenues exceeding RON129 million.
 
Prime Minister Emil Boc said last week that PSD’s anti-crisis proposals will be evaluated as regards their financial impact and the engagements agreed with the International Monetary Fund and the European Commission.
 
The social-democrats proposed a Plan of action including 24 measures aiming to get Romania out of the economic crisis, such as reducing the value added tax for bread, unprocessed poultry and milk and cutting by one third the energy bill for household consumers, depending on the level of revenues, as well as for companies hurt by the economic crisis.