Radio România Internațional

Tag: income tax

  • January 1, 2017 UPDATE

    January 1, 2017 UPDATE

    TENNIS The world’s best tennis player, Simona Halep, on Monday qualified for the round of sixteen of the WTA tournament in Shenzhen, China, which has more than 630 thousand dollars in prize money. The Romanian secured a two-set win, 6-4, 6-1 against US challenger Nicole Gibbs. In the second game of the day, Mihaela Buzarnescu of Romania conceded defeat to Maria Sharapova of Russia, while Ana Bogdan also from Romania lost to Camila Giorgi of Italy. On Sunday, Irina Begu outperformed Chinese Fangzhou Liu and qualified for the round of sixteen, whereas Monica Niculescu was eliminated by Aryna Sabalenka of Belarus. Irina Begu and Simona Halep have qualified for the tournament’s quarterfinals where they will be playing their compatriots Irina Bara and Mihaela Buzarnescu.



    FORECAST Romania’s National Forecast Committee estimates a 5.5% economic growth for 2018 and a GDP per capita of 10 thousand euros. According to this forecast, household consumption will be 6.2% higher than the value registered in 2017, while the real salary growth will be around 7.7%. International financial institutions have also forecast a significant growth rate of 4.2% for Romania in 2018.



    FISCAL MEASURES As of January 1st 2018, minimum wages in Romania will rise from 300 to 410 euros, the minimum pension will stay at 135 euros and the income tax will go down to 10%. Also spaced-out VAT payment becomes mandatory for companies with overdue debts or in insolvency. At the same time the social insurance contributions will be transferred from employers to employees, which implies the renegotiation of some labour contracts in which some incomes might be diminished. According to the government, suchlike measures will have a positive impact over the GDP, boosting the creation of fresh jobs, raising the employees’ purchasing power at the same time curbing illegal working. However, pundits believe the impact of the aforementioned measures both on the people and business environment cannot be properly assessed at present.



    EU On January 1st Bulgaria took over for the first time in history the EU rotating presidency. The block’s poorest member often criticised for its ineffective crackdown on endemic corruption, Sofia counts on the move to improve its image, France Press reports. Bulgaria, a country that joined the EU in 2007, tries to convince that it is ready to join the Schengen and the Euro zone as well. The Bulgarian presidency unfolds under the motto, ‘unity makes power’ and will be focusing on consensus, competitiveness and cohesion. Its number 1 priority is ‘the young people and Europe’s future’, next comes ‘European prospects and regional cooperation of the countries in Western Balkans’. The third priority is ‘security and stability within a strong and united Europe’ with emphasis on fighting illegal migration while the fourth priority is ‘digital economy and competitiveness’. A very difficult task for Sofia is to broker the Brexit talks. Another objective of the centre-right government headed by Boiko Borisov is to get the Control and Verification Mechanism, which still applies to Romania and Bulgaria, removed.

  • January 1, 2017 UPDATE

    January 1, 2017 UPDATE

    TENNIS The world’s best tennis player, Simona Halep, on Monday qualified for the round of sixteen of the WTA tournament in Shenzhen, China, which has more than 630 thousand dollars in prize money. The Romanian secured a two-set win, 6-4, 6-1 against US challenger Nicole Gibbs. In the second game of the day, Mihaela Buzarnescu of Romania conceded defeat to Maria Sharapova of Russia, while Ana Bogdan also from Romania lost to Camila Giorgi of Italy. On Sunday, Irina Begu outperformed Chinese Fangzhou Liu and qualified for the round of sixteen, whereas Monica Niculescu was eliminated by Aryna Sabalenka of Belarus. Irina Begu and Simona Halep have qualified for the tournament’s quarterfinals where they will be playing their compatriots Irina Bara and Mihaela Buzarnescu.



    FORECAST Romania’s National Forecast Committee estimates a 5.5% economic growth for 2018 and a GDP per capita of 10 thousand euros. According to this forecast, household consumption will be 6.2% higher than the value registered in 2017, while the real salary growth will be around 7.7%. International financial institutions have also forecast a significant growth rate of 4.2% for Romania in 2018.



    FISCAL MEASURES As of January 1st 2018, minimum wages in Romania will rise from 300 to 410 euros, the minimum pension will stay at 135 euros and the income tax will go down to 10%. Also spaced-out VAT payment becomes mandatory for companies with overdue debts or in insolvency. At the same time the social insurance contributions will be transferred from employers to employees, which implies the renegotiation of some labour contracts in which some incomes might be diminished. According to the government, suchlike measures will have a positive impact over the GDP, boosting the creation of fresh jobs, raising the employees’ purchasing power at the same time curbing illegal working. However, pundits believe the impact of the aforementioned measures both on the people and business environment cannot be properly assessed at present.



    EU On January 1st Bulgaria took over for the first time in history the EU rotating presidency. The block’s poorest member often criticised for its ineffective crackdown on endemic corruption, Sofia counts on the move to improve its image, France Press reports. Bulgaria, a country that joined the EU in 2007, tries to convince that it is ready to join the Schengen and the Euro zone as well. The Bulgarian presidency unfolds under the motto, ‘unity makes power’ and will be focusing on consensus, competitiveness and cohesion. Its number 1 priority is ‘the young people and Europe’s future’, next comes ‘European prospects and regional cooperation of the countries in Western Balkans’. The third priority is ‘security and stability within a strong and united Europe’ with emphasis on fighting illegal migration while the fourth priority is ‘digital economy and competitiveness’. A very difficult task for Sofia is to broker the Brexit talks. Another objective of the centre-right government headed by Boiko Borisov is to get the Control and Verification Mechanism, which still applies to Romania and Bulgaria, removed.

  • Amending the Fiscal Code under debate

    Amending the Fiscal Code under debate

    The motion filed against Finance Minister, Ionut Misa on Monday was rejected by the Senate. Initiated by the National Liberal Party and backed by the People’s Movement Party and the Save Romania Union, all in opposition, the motion accused the fact that the implementation of the government programme with which the Social-Democratic Party had won the elections has already given rise to economic imbalance difficult to overcome and the consumption-based economic growth proves its shortcomings. Furthermore, the signatories to the motion denounced the fiscal chaos triggered by the Tudose Cabinet: the increase of structural spending on wages, the lowering of public investment and tax returns. Liberal senator Romulus Bulacu:



    “Through our vote, we, MPs of the National Liberal Party, the People’s Movement Party and the Save Romania Party, call upon the Tudose Government to take measures to restore the budget deficit to its set parameters as soon as possible, to ensure the fiscal stability and predictability required by the business sector, to take steps in order to protect Romanian businesses and capital, cut labour force taxes, boost direct investment, reduce spending on wages and social welfare; we also demand the resignation of the finance minister.”



    Sharply criticizing the fiscal amendments envisaged by the Social-Democrats, president Klaus Iohannis reiterated that the implementation of the new measures must be postponed and they should be drawn up after a thorough analysis. Largely criticized by company managers, unionists and part of civil society, the amendments are fiercely defended by the Government. The latter says that the package of fiscal measures can create the premises for a sustainable economic growth pace, Romania currently being one of the EU’s most dynamic economies.



    The Draft Ordinance amending the Fiscal Code says that starting January 1st 2018, social security contributions will be paid by employees and no longer by employers, the income tax will go down from 16 to 10% and employers will pay a solidarity tax. The government session focusing on the adoption of the Ordinance has been put off twice so far. When it comes to a package of such important measures, urgency is not a key factor for the rulers. In exchange, those who oppose the amendments to the Fiscal Code say that the rulers want to procrastinate adopting the measures either because they are insufficiently substantiated or they step back fearing criticism. Criticism has also come from the mayor of Bucharest, Gabriela Firea, a member of the Social-Democratic Party, who is afraid that the fiscal amendments might trigger the decrease of funds for investment in local communities. (Translated by A.M. Palcu)