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Romania’s Government Seeks a Progressive Tax System From 2013

May 11 (Bloomberg) -- 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

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