Romania’s Government Seeks a Progressive Tax System From 2013

Romania’s new government plans to scrap the country’s flat tax from 2013 and introduce a progressive taxing system pending a win at this year’s elections, Prime Minister Victor Ponta said.

The newly instated cabinet seeks to design next year’s budget using a progressive taxing system with an 8 percent tax for low-income earners, a 12 percent tax for average incomes and a 16 percent tax for high incomes and cut some social contributions, Ponta said in a document published on the cabinet website today.

Romania introduced a flat tax of 16 percent in 2005 to attract foreign investors. Ponta’s government took office on May 7 after his Social-Liberal Union ousted former Prime Minister Mihai-Razvan Ungureanu in a no-confidence vote in Parliament.

The alliance, known as USL, would win 61 percent of the votes in a general election, a survey, conducted by pollster IRES on May 2 among 1,209 people, showed. Romania is scheduled to hold parliamentary elections in the second half of this year.

To contact the reporter on this story: Andra Timu in Bucharest at atimu@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.