Tag: taxation

  • What are entrepreneurs waiting from the future government

    What are entrepreneurs waiting from the future government

    Entrepreneurs, who convened on Monday for a specialized online event, have emphasized the risk of a potential economic recession that might hit Romania in the second part of 2025 and have called on the new Executive to take measures to avoid it.

    They recalled that 2024 was an extremely challenging year, when, besides the difficult economic and geopolitical background, the business environment had to face a significant fiscal-budgetary instability. “Romania is in an extremely fragile context, being the only EU country combining big twin deficits: we have an estimated budget deficit of 7.9% and a current account deficit standing at 8.4%, which is very much likely to grow by the end of 2024. According to statistic data, the current account deficit grows by at least 1.5 in December, mainly in the context of the 2024 election year,” says Cristina Chiriac, the president of the National Confederation for Women Entrepreneurship (CONAF).

    Romania will also have elections in the first semester of 2025.

    Cristina Chiriac: “I believe that if we want to avoid going into the economic recession zone, we must adjust the budget deficit and the current account deficit, without resorting to difficult measures. I mean, we must cut public spending, mainly in the non-productive areas; we must increase the effectiveness of tax collection and avoid fiscal overcharging in the business environment.”

    Business people said that under the present circumstances, when budgets must be adjusted almost every three months according to fiscal or legislative amendments, entrepreneurial companies cannot work with multiannual budgets, draw up business plans and make future forecasts.

    The need for predictability has also been underlined by Feliciu Paraschiv, vice-president of the National Association of Small and Medium-size Entrepreneurs in Romania.

    Feliciu Paraschiv: “We are having a series of big issues with the budget deficit and the persistent inflation as they come together, you know. And, at a better look we see that we are also having uncertain taxation, where the legislative amendments are more than ever.”

    Entrepreneurs have also mentioned the need for keeping inflation under control, and avoiding the implementation of other similar measures such as the e-Factura, (e-Invoice) or e-Transport, which have hindered the activity of companies. They have also urged the Romanian politicians to rely more on business expertise and endorse the measures focusing on the good functioning of the economy only after talks with all the parties interested.

    (bill)

  • August 27, 2024

    August 27, 2024

    WEATHER Romanian meteorologists on Tuesday issued a code yellow alert for unstable weather valid until Wednesday morning for half of the Romanian territory. Heavy downpours are expected in the center, in the mountains and some regions in the country’s east and south. Thunder and hailstorms have been forecast in isolated regions whereas the heatwave will remain in southern and western Romania, whose residents are again facing with a higher thermal discomfort index and more muggy days. The highs of the day will be ranging between 27 and 35 degrees with a noon reading in Bucharest of 34.

     

    PENSIONS As of October 1st the taxation ceiling of pensions in Romania is going to grow from 400 Euros at present to 600 Euros, Labour Minister Simona Bucura-Oprescu announced on Monday night. She said the decision was made after a new round of talks she had with Prime Minister Marcel Ciolacu. So, on October 1st, taxes will account for 10% of the difference exceeding 3 thousand RON. The minister’s statement comes after the head of the government announced that he had called on the Finance Minister to conduct research and see whether a new taxation ceiling was needed after the implementation of the new legislation. The Finance Ministry is expected to conduct another research so that pensioners may not incur loses or have the food vouchers removed. We recall that pensions under 2 thousand lei are presently exempted from taxation but a 10% tax is levied on pensions exceeding this sum.

     

    INDEPENDENCE President Maia Sandu on Tuesday conveyed a message congratulating the citizens of the Republic of Moldova on the occasion of marking 33 years since the proclamation of the country’s independence. ”Moldova is our home and we choose a future of peace and prosperity. We are writing our history. Many Happy Returns, Moldova!” Sandu says quoted by Moldpres. In Bucharest, Romanian president Klaus Iohannis says that Romania will continue to offer strategic support to Moldova in all areas. ‘I congratulate the citizens of the Republic of Moldova on Independence Day! You are part of the great European family and the continuation of the present efforts will transform the EU accession into an accomplished objective, the Romanian head of state wrote on the X platform. Other high officials in Bucharest have conveyed congratulation messages on this occasion. On August 27 1991, tens of thousands took to the streets of Chisinau and called on Parliament to endorse the country’s independence, which it eventually did.

     

    TENNIS Romanian tennis player Gabriela Ruse has qualified for the second round of the US Open, the year’s last Grand Slam tournament after a two-setter against Julia Grabher of Austria. Ruse will be up next against Barbora Krejcikova of the Czech Republic, this edition’s winner of the Wimbledon tournament. The other Romanian representatives in the singles contest, Ana Bogdan and Jaqueline Cristian have been knocked out in the first round after losing to Arantxa Rus of the Netherlands and 12th-seeded Daria Kasatkina of Russia, respectively.

    (bill)

     

  • November 1, 2023 UPDATE

    November 1, 2023 UPDATE

    TAXATION Some of the new fiscal measures aimed
    at reducing the budget deficit in Romania came into force on Wednesday. Under
    the law for which the Government has assumed responsibility in Parliament, personnel
    in the IT sector will pay an income tax for amounts exceeding EUR 2,000 per month. Local
    public institutions and authorities cannot use public funds for the organisation
    of community events, such as festivals, concerts, local competitions or other
    themed celebrations. Other fiscal measures, such as the introduction of new
    taxes for SMEs and the payment of health insurance contributions for the value
    of meal vouchers, will take effect on January 1, 2024. The measures run counter
    to many entrepreneurs’ interests. At a conference on this topic, organised by
    the Chamber of Commerce and Industry of Romania, the participants argued that in
    order to contain the budget deficit, top priority measures should include combating
    tax evasion, improving revenue collection and improving the work of the Tax
    Office. The President of the Chamber, Mihai Daraban, said that the government
    now has more options available before attacking the business community.




    PENSIONS In Romania, a draft pensions law has been posted for public
    review on the Labour Ministry’s website. The document was approved by the
    ruling coalition, and the government is seeking to have it endorsed under an
    emergency procedure by the end of this month. Under the new legislation, all
    pension benefits will be adjusted to the annual inflation rate, and will be
    re-calculated based on a new formula. No benefits will be lower than they are
    at present, the PM Marcel Ciolacu promised after a meeting of the ruling
    coalition. The minimum contribution period will be 15 years, and the maximum
    period 35 years, with bonuses given for workplace stability. According to the
    Prime Minister, pensions will be raised in 2 stages next year, on January 1 and
    on September 1, respectively.






    DONATION The first F16 fighter jets that the
    Netherlands will donate to Ukraine will arrive at a training center set up in
    Romania in two weeks, the Dutch Prime Minister Mark Rutte announced. He emphasised
    that the current situation in the Middle East should not and will not be able
    to distract the Netherlands from the fight of the Ukrainians against the
    Russian aggression. Denmark, Norway and Belgium have also announced that they
    will supply Ukraine with F16 aircraft.




    FOOTBALL The match between the national
    football teams of Israel and Romania, in the EURO 2024 Qualifying Group I, will
    take place in Hungary, the Romanian football federation announced. The game
    will be played on November 18, in Felcsut, approximately 50 kilometers from
    Budapest. UEFA stated that the presence of spectators will be
    allowed. Previously, the organisation had decided to suspend all matches scheduled
    in Israel, because of the armed conflict there. After the match against Israel,
    Romania is to meet Switzerland, on November 21, in Bucharest. After eight
    games, Romania is undefeated and ranks first in the group, with 16 points.
    Switzerland (15 points) and Israel (11 points) have played one match and two
    matches less, respectively. The two top-ranking teams go to the final
    tournament in Germany. Romania has not reached a European championship final
    tournament since 2016, and a World Cup since 1998.




    RADIO Radio Romania celebrated 95 years of uninterrupted broadcasting.
    In recognition of the critical role that Radio Romania has in Romania’s
    history, in December 2019 Parliament decided to establish November 1 as the
    National Radio Day. Over three million people listen to Radio Romania every
    day. Public institutions, NGOs, major personalities in Romania’s arts and
    cultural scene have congratulated Radio Romania on the occasion. PM Marcel Ciolacu pointed
    out that for 95 years, the public radio broadcaster has been a source of
    information and education for generations of listeners, while the Senate
    speaker Nicolae Ciucă said that Radio Romania has been promoting Romanian
    traditions and values for nearly a century and deserves recognition for its
    efforts in this respect. The president of the Romanian Academy Ioan-Aurel Pop
    also congratulated the Romanian Radio Broadcasting Corporation, which, he said,
    has been a witness to all the milestones in Romanian history. In Timişoara,
    this year’s European Capital of Culture, the Gaudeamus Radio Romania Book Fair takes
    place until November 5. On Friday, November 3, an anniversary concert of the
    National Radio Orchestra is scheduled, and between November 22 and 26, a new
    edition of the Gaudeamus Radio Romania Book Fair, the longest-running project
    of its kind in the country, will be organised at the Romexpo exhibition centre
    in Bucharest. (AMP)

  • July 31, 2022 UPDATE

    July 31, 2022 UPDATE

    TAXATION On 1 August, some of the
    fiscal measures introduced recently by the coalition government made up of the
    National Liberal Party, Social Democratic Party and the Democratic Union of
    Ethnic Hungarians in Romania take effect. On Monday the tobacco excise duty is
    to increase, as is the tax on gambling gains. Changes are also operated as
    regards salaries in the construction industry, agriculture and foodstuffs, where
    the ceiling for certain tax rebates will be lowered. Further changes to the
    Fiscal Code will take effect early next year. For example, in the hospitality
    industry VAT will be raised from 5 to 9%, while the VAT for non-alcoholic beer
    and for sugary drinks will be raised to 19%. Sales of houses bigger than 120
    sqm or for prices of over EUR 120,000 will also carry increased VAT. According
    to government estimates, these changes will bring the state budget an
    additional EUR 243 million this year and some EUR 2.1 billion in 2023.



    FESTIVAL Transylvania is a model of inter-ethnic harmony and
    tolerance at European level, the PM Nicolae Ciuca said at the Haferland Week
    Festival, devoted to the Saxon culture. The PM highlighted that Romania is a
    democratic state, where diverging or even opposing views and ideas may be
    expressed, but that these views must not become radical and any expression of
    authoritarianism, extreme nationalism or populism must be prevented. Also
    attending the Haferland Week, president Klaus Iohannis said it was very
    important for each of us to be aware of the threat entailed by climate change,
    and added that we have a responsibility towards protecting our planet and
    resources. In this context, he emphasised, education remains the key to a
    greener future and a sustainable society.


    DIPLOMACY In the context of Romania’s strong show of solidarity
    during this war in Ukraine, with our management of the over 1.75 million
    Ukrainian refugees who have entered Romania since the start of the war, a
    situation which we have managed successfully, I believe we can hope for
    consistent and firm support from Germany for Romania’s Schengen accession as
    soon as possible, the Romanian foreign minister Bogdan Aurescu said. This is
    important among other things for the inter-human relations between Romania and
    Germany, between the ethnic Germans in Romania and Germany and conversely,
    between the Romanian community in Germany and Romania, Aurescu emphasised upon
    opening on Sunday the Romanian-German Bilateral Cooperation Forum, on the
    sidelines of the 10th edition of the ‘Haferland Week’ cultural
    festival in Romania.


    CENSUS Sunday was the
    last day of the official population and housing census in Romania, after
    several extensions. According to the National statistics Institute, over 90% of
    the process had been completed by early this week. The purpose of the census was
    to establish the number of people living on Romanian territory, as well as the
    living standards in each locality. Based on the data collected, the
    authorities will create public policies and earmark funding for each town or
    village. At EU level, the number of people
    living in Romania is a criterion in the distribution of EU funds. The census was
    compulsory for all Romanian citizens.


    COVID More than 4,000 new
    SARS-CoV-2 infections out of over 13,000 tests, as well as 13 COVID-related
    deaths were reported on Sunday in Romania, the authorities announced. The
    number of COVID patients in hospitals is over 3,900, of whom more than 260 are
    in intensive care. The authorities estimate that next week Romania could see
    10,000 new cases per day. Although spreading very quickly, this variant of the virus causes less
    severe forms of the disease.


    UKRAINE The Romanian foreign ministry condemns the shelling of the
    Olenivka prison and the killing of Ukrainian POWs, reads a message issued on
    Sunday. These heinous crimes committed by Russia call for international
    investigation and sanctioning. Condolences to the families and full support for
    Ukraine, the foreign ministry’s Twitter post also reads. A prison in Olenivka was
    attacked on Friday, with most of the 193 Ukrainian prisoners of war there
    killed or wounded, according to the Russian defence ministry, which Saturday
    released the names of 50 dead and 73 wounded. Russia claims the strike came
    from a HIMARS system provided by the US to Ukraine, as Kyiv seeks to recover
    the territories controlled by pro-Russian separatists in the east of the
    country. Ukraine replied it would never attack civilian sites, especially one
    housing its own people, and accused Russia of organising the attack in
    retaliation against the Ukrainian nationalists among the prisoners brought
    there from Mariupol several weeks ago. (AMP)

  • July 31, 2022

    July 31, 2022

    TAXATION On 1 August, some of the fiscal measures introduced
    recently by the coalition government made up of the National Liberal Party,
    Social Democratic Party and the Democratic Union of Ethnic Hungarians in
    Romania take effect. On Monday the tobacco excise duty is to increase, as is
    the tax on gambling gains. Changes are also operated as regards salaries in the
    construction industry, agriculture and foodstuffs, where the ceiling for
    certain tax rebates will be lowered. Further changes to the Fiscal Code will
    take effect early next year. For example, in the hospitality industry VAT will
    be raised from 5 to 9%, while the VAT for non-alcoholic beer and for sugary
    drinks will be raised to 19%. Sales of houses bigger than 120 sq.m. or for prices
    of over EUR 120,000 will also carry increased VAT. According
    to government estimates, these changes will bring the state budget an
    additional EUR 243 million this year and some EUR 2.1 billion in 2023.



    FESTIVAL Medieval
    Sighişoara Festival in central Romania comes to a close today with a
    concert by the rock band Cargo and a spectacular fireworks show. Currently in
    its 28th year, the festival recreated the medieval feel with the
    help of the over 100 participating artists. Events included medieval music and
    dance performances, theatre plays, animation, and arts and crafts workshops. The
    festival was organized under the patronage of Her Majesty Margareta, custodian of the Crown of Romania. Sighişoara is the
    only inhabited medieval citadel in south-eastern Europe.


    MILITARY The world’s
    strongest air assault force, the US 101st Airborne Division, started
    its mission in Romania, following a decision in this respect taken at the
    recent NATO summit in Madrid. PM Nicolae Ciucă Saturday took part in the
    ceremony in which the US unit presented its colours at Mihail Kogălniceanu Airbase
    57 and welcomed the presence of this force, which contributes to strengthening
    NATO’s eastern flank. The Romanian official thanked the US troops deployed to
    Romania for their effort and contribution to the country’s security. Civilians,
    airport personnel and their families then watched an impressive demonstration
    showcasing the firepower of the Romanian and US armed forces. Created in 1942 to free Europe from the Nazi
    occupation, the US 101st Airborne Division has 2,400 troops
    deployed in Romania, 4,700 in Europe and nearly 20,000 around the world. In one
    night alone, it can mobilise a brigade of 4,000 troops and hundreds of military
    vehicles, equipment and weapon systems, an assault force able to overwhelm any opponent.


    CENSUS Sunday is the
    last day of the official population and housing census in Romania, after
    several extensions. According to the National Statistics Institute, over 90% of
    the process had been completed by early this week. The purpose of the census is to
    establish the number of people living on Romanian territory, as well as the
    living standards in each locality. Based on the data collected, the
    authorities will create public policies and earmark funding for each town or
    village. At EU level, the number of people
    living in Romania is a criterion in the distribution of EU funds. The census is
    compulsory for all Romanian citizens.


    COVID More than 4,000 new SARS-CoV-2 infections out of over 13,000
    tests, as well as 13 COVID-related deaths were reported on Sunday in Romania, the
    authorities announced. The number of COVID patients in hospitals is over 3,900,
    of whom more than 260 are in intensive care. The authorities estimate that next
    week Romania could see 10,000 new cases per day. Although spreading very
    quickly, this variant of the virus causes less severe forms of the disease.


    TENNIS
    The Romanian tennis player Ana Bogdan (108 WTA) plays today against Caroline
    Garcia of France (45 WTA), in the Warsaw WTA tournament finals. They only
    played against each other once before, at Wimbledon
    in 2017, when the French player won. On Saturday, Ana Bogdan, currently
    at her first WTA final in her career, defeated Kateryna Baindl of Ukraine (190
    WTA), 7-5, 7-5. (AMP)

  • June 17, 2022 UPDATE

    June 17, 2022 UPDATE

    EU – The European Commission has recommended Member States to grant EU
    candidate status to Ukraine and the Republic of Moldova, European Commission
    president, Ursula von der Leyen, announced on Friday. Romania’s president,
    Klaus Iohannis, hailed the Commission’s decision, saying this is a well-deserved
    step forward for the citizens of the two states. We will continue to actively
    support Ukraine, the Republic of Moldova and Georgia in their efforts to become
    members of the European Union family, Iohannis wrote on Friday on social
    media. On Thursday, during his visit to Kyiv, France’s president, Emmanuel
    Macron, said France, alongside Germany, Italy and Romania, supports the idea of
    immediately granting candidate status to Ukraine. In turn, Ukraine’s
    president, Volodymyr Zelensky, described the visit of the leaders of France,
    Germany, Italy and Romania as a historical moment. Ukraine enjoys the support
    of four strong European states, Zelensky said, adding that Ukraine is closer to
    the EU than ever. On the other hand, the spokesperson of the Russian Foreign
    Ministry, Maria Zakharova, reacted to the Commission’s decision, accusing the
    EU of manipulating Ukraine with respect to EU accession.




    VISIT – Romania’s president, Klaus Iohannis, on Friday said NATO has the
    capacity of dealing with any threats and provocations, current or prospective. The
    head of state met King Philippe of Belgium at the Mihail Kogălniceanu airbase in Constanța
    County. President Iohannis thanked Belgium for the important contribution of
    its military to NATO missions in Romania. Together
    we are stronger and more efficient in our common effort to consolidate the
    security of Euro-Atlantic space and of our citizens, the president said. In
    turn, the King of Belgium expressed hope the war in Ukraine would end soon,
    pointing out that the West’s support will continue even after the war is over. NATO
    was quick to respond, it brought troops and equipment on the Eastern Flank.
    Your presence here, militaries from seven NATO countries, far away from your countries,
    at times having to deal with difficult circumstances, proves that NATO
    solidarity is being tested in critical moments, King Philippe said. On
    Wednesday, France’s president Emmanuel Macron also visited the Mihail Kogălniceanu airbase in Constanța
    County. On this occassion, president Klaus Iohannis said the two countries are
    bound by excellent ties. Cooperation between Romania and France in the field of
    security has gone up significantly in recent months, amidst the Russian
    invasion of Ukraine, the Romanian president said, again expressing gratitude for the presence of
    French troops in Romania and for France taking command of the NATO battlegroup
    in our country.




    TAXATION – The National Fiscal Administration (ANAF) will perform
    additional controls starting July 1 to examine the financial statements of
    people suspected of tax evasion. The administration chief, Lucian Heiuș, said Friday that ANAF has identified a 20-billion-EUR
    difference between the estimated and declared income in the case of 560
    thousand people. Lucian Heiuș said the number
    of teams inspecting financial statements will increase from 22 at present to
    100, while the number of inspectors will be further supplemented started next
    year.




    REFUGEES – The Romanian Border Police has
    announced that 100,644 people entered Romania on Thursday, of whom 9,766 are
    Ukrainian citizens. Of these, 5,557 crossed the border into Romania from
    Ukraine and 1,156 from Moldova. Since February 24 until Thursday, some
    1,221,710 Ukrainian citizens have entered Romania.


    TENNIS -
    Romanian tennis player Sorana Cîrstea on Friday
    advanced to the semifinals of the WTA 250 tournament in Birmingham after
    defeating Donna Vekic of Croatia (WTA 92), score 5-7, 6-3, 6-4. Also on Friday,
    Simona Halep ousted Katie Boulter of the United Kingdom, 6-4, 6-1. On Thursday,
    Gabriela Ruse was knocked out by eighth-seed Shuai Zhang of China, 6-2, 2-6,
    7-5. (VP)





  • May 23, 2022 UPDATE

    May 23, 2022 UPDATE

    ECONOMY Seven countries, including Romania, continue to
    experience imbalances, the European Commission announced on Monday, having
    assessed the existence of macroeconomic imbalances for the 12 Member States
    selected for in-depth reviews in the 2022 Alert Mechanism Report. The
    Commission points out that vulnerabilities in Romania’s economy relate to
    external accounts, linked to large fiscal deficits, and to competitiveness
    issues that are re-emerging. Large fiscal deficits pre-date the COVID-19 crisis
    and have driven up the current account deficit, which poses risks to external
    debt sustainability. Government debt increased significantly, although from
    moderate levels, sovereign borrowing costs kept growing, while bureaucracy and
    a volatile legislative framework will be a burden for investments, the
    Commission warns.


    RECOVERY The first payment request under the National Recovery and
    Resilience Plan, amounting to EUR 3 bln, will be submitted to the European
    Commission, PM Nicolae Ciucă announced on Monday. The money will finance
    projects in all the sections of the Plan and will impact several strategic
    sectors for Romania. PM Nicolae Ciuca appreciated the efforts of the
    institutions involved in the management of the RRP and asked for a steady pace
    in the efficient and high-quality implementation of the reforms and investment
    projects. This is an effort that must be carried on and extended in order for
    Romania to benefit from the EUR 30 bln available under the RRP for
    modernisation and development projects, Ciucă said.


    UKRAINE The number of people forced to flee conflict, violence, human
    rights violations and persecutions has exceeded 100 million for the first time,
    as a result of the war in Ukraine and other deadly conflicts, shows a statement
    from the UN High Commissioner for Refugees (UNHCR). The figure is staggering,
    worrying and should have never been reached, said UN High Commissioner for
    Refugees Filippo Grandi. By the end of 2021, the number of displaced people had
    reached 90 million worldwide, due to new waves of violence or protracted
    conflicts in countries such as Ethiopia, Burkina Faso, Myanmar, Nigeria,
    Afghanistan and the Democratic Republic of Congo. On February 24, the Russian
    President Vladimir Putin ordered the invasion of neighbouring Ukraine, throwing
    further millions of people into the streets to flee fighting and reach less
    exposed regions or other countries. Europe has not seen such a rapid inflow of
    refugees since the end of World War II, UNHCR points out. Nearly 6.5 million
    Ukrainians have left the country, mostly women and children, and the UN
    estimates that their number could exceed 8 million by the end of the year.


    CANNES The Romanian filmmaker Cristian Mungiu, competing at the Cannes Film
    Festival, hopes that his film ‘R.M.N.’, in which a village in Transylvania is
    like an explosive laboratory of populism, will open the eyes of Europeans to
    this evil that has been gnawing at them, AFP reports. Mungiu is in the race for
    a second Palme d’Or Prize, 15 years after his ‘4 months, 3 weeks and 2 days’.
    The film title, ‘R.M.N.’, refers to the medical term MRI – magnetic resonance
    imaging: Mungiu scans the underbelly of populism, an evil that has metastasized
    in a still traditional village, on the borders of Europe, AFP reports. ‘I hope
    that the public do not easily shy away from their responsibilities, do not
    think that this is happening in a remote, wild land. I’m afraid that’s not the
    case,’ said director Mungiu. The film takes place a few days before Christmas,
    in a village in Transylvania, where the Roma population disappeared, driven
    away by the inhabitants and the force of prejudice, and where the new ‘cursed
    people of the Earth’ appeared: Sri Lankan workers, brought to work at the local
    bakery after the Romanians went to work in the west. (AMP)

  • Tax on special pensions

    Tax on special pensions

    A recurrent topic in public debates in Romania, the taxation of the so-called “special pensions, which are not based on prior contributions to social security funds, seems to have been finally settled. On Wednesday, the Chamber of Deputies approved, almost unanimously (307 votes in favour and only one against) the introduction of a tax on the balance between special pension benefits and the pension determined by regular contributions to the public pension fund during employment.



    Pensions between roughly 400 and 1,500 euro (some 7,000 lei) will be subject to a 10% tax, as it has been the case so far; however, for amounts in excess of this threshold, the tax will be 85%.



    The decision regarding the progressive taxation of special pensions was taken in an accelerated procedure, by all parliamentary parties. The former labour minister, the Social Democratic Deputy Lia Olguţa Vasilescu, promised that the document is in compliance with constitutional provisions:



    Lia Olguţa Vasilescu: “We fully complied with the Law on public pensions, but if a magistrate or an MP or whoever receives pension benefits in excess of 7,000 de lei, up to that level the tax will be 10%. Nobody can tell the Constitutional Court that their rights have been infringed on.



    The leader of the Liberal group in the Chamber of Deputies, Florin Roman, was just as straightforward:



    Florin Roman: “Obviously, there must be lots of judges, lots of prosecutors, lots of police or army chiefs who are very upset about this. But what we are doing here, with this bill, does justice to the military, to police officers, where there were huge gaps between the pensions paid to those who had been in theatres of operations and those paid to high-ranking generals just sitting in an office.



    According to data communicated by the Public Pensions Agency, the number of people receiving special pension at the end of last month was around 9,500. Nearly 4,100 of them are covered by the Law regulating the prosecutor and judge professions. One of them is the recipient of the largest pension in Romania, over 19,000 lei. Special pensions are also paid to around 150,000 former employees of the public order and national security systems.



    Observers have noted the unusual consensus reached by parliamentary parties in this respect. Somehow, they say, this was bound to happen. On the one hand, because, given the COVID 19 pandemic and the enormous public spending it required, the scheduled 40% increase of regular pensions this autumn is increasingly unlikely. And secondly, because in a few short months Romania has local and parliamentary elections, and no party will refrain from trying to humour voters with measures that people agree with.


    (translated by: Ana-Maria Popescu)

  • June 17, 2020 UPDATE

    June 17, 2020 UPDATE

    Covid-19 The Romanian Government decided to extend the state of alert by another 30 days, against the background of the Covid-19 pandemic. The measure came into force on Wednesday, though several restrictions have also been lifted. Among other things, fitness centres, betting and gambling centres and the shops inside malls have been reopened. Also, religious services are allowed inside churches. According to the authorities, although the trend has been downward, the number of cases of infection with the new coronavirus might grow anytime. Lately, new cases have been reported, raising the total to 22,760 infections. The death toll now stands at 1,451. Of those who tested positive, more than 16,100 recovered. In related news, 85 Romanian nationals working on a farm in Bavaria tested positive for the novel coronavirus. All are asymptomatic and quarantined.



    PENSIONS The Chamber of Deputies Wednesday endorsed a bill regulating the taxation of the so-called “special pensions, a controversial topic in Romanian society. With 307 votes in favour and just 1 against, the bill, endorsed by the Senate in 2019 as well, was backed by all parliamentary parties. According to Radio Romania News and Current affairs, the Deputies decided to introduce a tax on the balance between regular pensions, based on contributions to social security funds, and special pensions. Incomes from special pensions in excess of 7,000 lei (little under 1,500 euros) will thus be subject to an 85% tax. Unless it is challenged at the Constitutional Court, the bill will be forwarded to the President for promulgation. The Chamber of Deputies also passed a bill that provides that criminals convicted for manslaughter, rape, aggravated robbery, sexual abuse against children and exploitation of begging can no longer benefit from conditional release.



    FLIGHTS The Bucharest Airports National Company organized on Wednesday an event titled ‘Everything will be fine!’, which marks the resumption of flights after the break imposed by the global coronavirus crisis. Specifically, flights have been resumed to and from Austria, Germany and Switzerland, whereas those to and from the Czech Republic, Greece, Portugal and Scandinavian countries were resumed a while ago. A spokesman for the company said investments were not suspended or delayed in April and May, when the companys revenues fell by nearly 98%. At the same time, Wednesdays event was devoted to the anniversary of the first flight by a Romanian plane, designed, built and piloted by Aurel Vlaicu, on June 17, 1910.



    FOOTBALL The match pitting Romanias football team against Iceland, in the semi-finals of the European Championship playoffs, postponed twice over the coronavirus pandemic, will be played in Reykjavik on October 8, UEFA announced on Wednesday. Should it win, Romania will take on the winner of the match between Bulgaria and Hungary, on November 12. The goal is to qualify into the European Championship final tournament, rescheduled for the summer of 2021, which will be hosted by the same 12 European cities, including Bucharest. UEFA Nations League matches will also be played this autumn.


    (translated by: Ana-Maria Popescu)

  • September 18, 2019

    September 18, 2019

    DEADLOCK The Constitutional Court in Bucharest is to discuss today the notification filed by PM Viorica Dancila with respect to a possible conflict of powers, triggered by the Presidents refusing to appoint interim ministers. Last week President Klaus Iohannis announced he would not accept the reshuffling proposed by the Prime Minister, which he dismissed as “void and unsuitable. Last Wednesday Viorica Dancila sent the head of state a document nominating members of the Alliance of Liberals and Democrats for the vacant positions in Cabinet after that party left the ruling coalition last month. Also today, the Social Democratic Partys National Executive Committee convenes to discuss the situation of the Cabinet, which has many minister positions still unfilled.



    VISIT The prime Minister of Romania Viorica Dăncila received in Bucharest today her Polish counterpart Mateusz Morawiecki, for a second round of inter-governmental consultations between the 2 countries. This is the second inter-government meeting after the one in Warsaw last May, and it takes place in the context of the celebration of a decade-long strategic partnership, of 3-decades long democratic regime and of a century of diplomatic relations. The members of the 2 governments will sign a memorandum of agreement in major sectors, including infrastructure, energy, transport, communications, digitisation, entrepreneurship and the management of European funds.



    FESTIVAL In Bucharest, classical music lovers are invited today to concerts with highly appreciated artists, as part of the George Enescu International Festival. Todays programme includes a concert of the Lille National Orchestra, conducted by Vlad Vizireanu, at the Romanian Athenaeum. The soloists, Sergey Khachatryan, on violin, and Timothy Ridout, on the viola, will perform George Enescus Chamber Symphony for 12 instruments, Johannes Brahmss Violin Concerto in D major and ‘Harold in Italy’ by Hector Berlioz. The George Enescu International Festival, with Radio Romania as a co-producer, will continue until September 22, bringing together 2,500 of the worlds most celebrated musicians in 84 concerts and recitals. Bucharest and other cities in Romania and in Germany, France, Italy, Canada and the Republic of Moldova are hosting performances as part of this years Festival.



    BILL A bill on the taxation of special pension benefits, introduced by the Finance Minister Eugen Teodorovici, has been passed by the Senate today after being approved by the budget committee on Tuesday. The document concerns a 30% tax rate on special pensions ranging between approx. 1,480 euro and 2,115 euro, and a 50% tax rate on pensions above this threshold. Senators also decided that country presidents emoluments in excess of roughly 1,480 euro should be subject to taxation. The bill will be sent to the Chamber of Deputies, the decision making body in this respect.



    EMPLOYMENT Most EU citizens working part time last year (26% of the total) said they could not find full-time jobs, while another 24% chose part-time work because they were looking after children or incapacitated adults, according to data released today by the European Statistics Office, Eurostat. The highest percentage of people who were working part-time in 2018 because they did not find full-time employment was reported in Greece (70%), Italy (66%), Cyprus (65%), Bulgaria (59%), Spain (56.5%) and Romania (54.9%). The lowest rates were reported in Estonia (6%), Belgium, the Czech Republic and Slovenia (7% each) and Netherlands (8%). Around one-fifth of the total number of employed EU citizens had part-time jobs last year, accounting for 31.2 million women and 9.5 million men.



    ISRAEL The Israeli PM Benjamin Netanyahu and his challenger Benni Gantz are shoulder to shoulder, with 32 seats each in the new Parliament, according to Tuesdays election results after counting over 92% of the votes. Israeli mass media note however that none of them has enough allies for a governmental majority. Israel Our Home party, whose 9 seats in Knesset make it indispensible for a ruling coalition, proposed a national unity government, but its leader Avigdor Lieberman is one of Netanyahus opponents. According to Radio Romanias correspondent, Israeli citizens would not agree to a new election campaign, and the countrys president vowed to avoid a third early election.


    (translated by: Ana-Maria Popescu)

  • Plans to levy taxes on high pensions

    Plans to levy taxes on high pensions

    The Senate’s budget and finance
    committee has given green light to a bill to levy a 30% tax on special pensions
    amounting to between 7,000 lei, the equivalent in lei of 1,480 euros, and 10,000
    lei, that is 2,115 euros. Pensions higher than 10,000 lei are to be subject to
    a 50% tax rate. This measure initially formed part of a package discussed during
    a budget adjustment made at the beginning of August. The initiator of the bill,
    the finance minister Eugen Teodorovici:




    Pensions below 2,000 lei are not
    subject to taxation, as stated in the government programme. A 10% tax rate is
    levied on pensions higher than 2,000 lei and we will propose that a 30% tax
    rate be levied on pensions between 7,000 and 10,000 lei, on the amount in
    excess of 2,000, to avoid double taxation or overlapping.




    The finance minister has explained
    that where pensions are made up of different incomes, an individual declaration
    is necessary to state the exact nature of each of these incomes. He has also
    proposed an amendment to his own bill stating that the component of a pension
    based on the principle of contributivity should not be subject to taxation. The
    budget and finance committee also adopted a bill under which the pensions of
    former presidents of the country should be subject to the same tax rate system.




    The Liberal senator Florin Citu
    proposed another amendment, rejected by the committee, that all special
    pensions in excess of 5,000 lei should be subject to a 90% tax rate. We must
    show tax payers acting in good faith and who pay their taxes and receive an
    average pension of 1,100 lei that we will no longer tolerate these special laws
    that have sprung up like mushrooms, he said. In his view, Teodorovici’s bill is
    a populist move ahead of the election campaign for the presidential elections
    in November.




    Eugen Teodorovici first spoke
    publicly about the idea to levy taxes on special pensions in July, alongside
    another measure aimed at boosting budget revenues: restricting the number of
    free train journeys for students. As expected, the proposal was met with harsh
    criticism from those who benefit from special pensions, in particular
    magistrates, who said it infringes on the independence of the judiciary.




    The average pension in Romania at
    the end of July amounted to the equivalent in lei of around 251 euros. This
    makes Romanian pensioners among the poorest in the European Union, not to
    mention that the constant rise in prices seen in recent years has eroded their
    purchasing power even more. The pension point went up by 15% on the 1st
    of September, a measures that benefits 5 million pensioners who receive public
    pensions.

  • Changes to the Romanian Government’s fiscal policy

    Changes to the Romanian Government’s fiscal policy

    The Romanian government on Friday
    approved changes to three emergency orders, including the infamous Order no.
    114 that levied more duties in important economic areas: banks,
    telecommunications and energy. This piece of legislation, which divided the
    political class, had been adopted by the government without consulting with the
    sectors targeted by the changes and was criticised both in Romania and abroad,
    in particular the European partners.




    According to prime minister Viorica
    Dancila, the changes to the three emergency orders are meant to reduce lending
    costs for the Romanians and boost the number of Romanian companies benefitting
    from advantageous loans from the banks. She added that through these changes,
    the calculation of the interest rate for loans in the national currency will
    also take into account an indicator that is based exclusively on interbank
    transactions, which will be published on the website of the National Bank of
    Romania. The Romanian
    Interbank Offer Rate, known as theROBOR index, will thus no longer be
    used in the calculation. As of May 2nd, the new reference index will
    apply to the new loans made by the population. As a result, the new index will
    also apply to the refinancing of ongoing loans.




    Another change made by the
    government refers to the privately-run pension fund known as Pillar II. The
    prime minister says talks were held with the share-holders and managers of
    private pension funds in Romania, the ministry for labour and social justice
    and the Financial Supervisory Authority with the effect that the regulations
    regarding the capital requirements imposed on pension fund managers will be
    suspended until 31st May. She explained that the measure was
    necessary to allow private pension fund managers to adjust to the new social
    capital conditions on the market. The obligatory minimum social capital in the
    case of a private pension fund manager, namely the equivalent in the national
    currency of 4 million euros, will be applied for this period.




    The energy sector also saw a series
    of clarifications and regulations. According to prime minister Viorica Dancila,
    these are aimed, among others, at boosting investment in the electricity sector
    and developing the natural gas supply networks by introducing the possibility of
    also doing so with public funds on a regional basis. Another measure is capping
    the price of gas and electricity for household consumers and lifting the cap for
    industrial consumers, following talks with representatives of the sector and
    the European Union.

  • Reactions to the proposed Fiscal Code revision

    Reactions to the proposed Fiscal Code revision

    The announcement made on Tuesday by the Romanian Finance Minister Eugen Teodorovici, that the Government is planning to bring major changes to the Fiscal Code starting 2019, changes that are to be adopted through an emergency decree before the end of 2018 has had the effect of an earthquake. Among the new provisions is a cap on natural gas prices for a three-year period, a 3% tax on turnover and a tax on banking assets seeking to cap the interbank ROBOR interest rates at a reference level of 1.50 percent.



    Minister Teodorovici: “Both partners must win: the financer, which is the bank and the one that gets the financing. On the one hand, there are the companies in Romania, which unfortunately pay higher costs as compared with other companies from other countries, given that the country risk is invoked in their case. Then there are also the natural persons.”



    Reactions to the finance minister’s announcement have started pouring soon after. First, there is a group that supports Minister Teodorovici’s measures and part of it is the Alliance of Liberals and Democrats (ALDE), a junior partner in the ruling coalition. Its leader, Calin Popescu Tariceanu, has said that the banks in Romania must invest the money they receive from the citizens in the economy of the host-country, something that they do not do at present. Moreover, the ALDE leader went on to say, banks prefer to invest their money in government bonds, that are also financed by the state, which means it is money collected from the taxes paid by the citizens.



    Then there is the group that opposes the new fiscal measures, that includes President Klaus Iohannis, the right-of-center parliamentary parties and the business environment, whose opinion is that these measures will create chaos in economy. While the Romanian Energy Regulatory Authority says the measures to be taken through an emergency decree will not trigger an increase in the price of energy and gas for household consumers in the upcoming period, the head of state, Klaus Iohannis, contradicts it.



    Klaus Iohannis: “The over-taxation of companies in the energy sector is intended. The only result that we can anticipate is that we will all have to pay more for electricity and gas. Decision makers in the telecommunication field have said this measure will surely affect them too, which means we will have to pay more for telephony and Internet. And this is only the beginning, because all companies use electricity, fuel and telecommunications, so, in short, everything will be more expensive.”



    From banks to big energy and IT&C companies and from associations of Romanian and foreign investors to economic analysts, all have warned that these additional taxes will affect companies and will be ultimately paid by the citizens. The first signal in this respect came from the Bucharest Stock Exchange, whose main index on Wednesday saw the biggest fall since the economic crisis of 2008.


  • The Year in Review (II)

    The Year in Review (II)

    Two governments, the same ruling coalition 2017 was the year when the government headed by Sorin Grindeanu was installed and also the year when he was sacked following a no confidence vote. Oddly enough, the same majority that put him in the prime minister post, namely, the Social Democratic Party and the Alliance of Liberals and Democrats (PSD-ALDE), was the one that tabled the censure motion. Sorin Grindeanu was sacked for political disobedience to the Social Democrat leader Liviu Dragnea. It was Mihai Tudose that replaced Grindeanu, in the second half of the year. “I’m expecting you to do everything in your power to support an independent justice system in Romania”, President Klaus Iohannis told the government last January. The new leftist Government inaugurated its mandate with the infamous Ordinance 13 that partially decriminalized the abuse of office, which would have triggered the pardoning of a number of politicians guilty of various offenses. This would have also been the case for Liviu Dragnea. However, the largest post-communist protests, in support of justice and against PSD followed, forcing the government to withdraw the emergency decree and prompting the resignation of its initiator, justice minister Florin Iordache. In spite of the fact that Sorin Grindeanu was replaced with Mihai Tudose, the battle for changing the justice laws continued and was taken over by Parliament, with the same Florin Iordache in the forefront. Shortly before the winter holidays, the PSD-ALDE majority, little impressed by the almost daily protests, passed, with the support of the Democratic Union of Ethnic Hungarians in Romania (UDMR), a package of laws regarding the status of magistrates, the judicial organization and organization of the Higher Council of Magistracy (CSM). This is, perhaps, the quickest and most controversial legislative process in the history of the Romanian Parliament. Through this action, the Power neutralized the right-of-center Opposition and ignored the concerns voiced by the country’s foreign partners as well as the criticism leveled against it by the judicial institutions and the magistrates’ associations. In an unprecedented move, judges in Bucharest and other Romanian cities protested in front of tribunals. Embassies of seven EU states voiced their concern at the risk of the new laws affecting the independence of the judiciary and the battle against corruption. Also, some of these laws were challenged as unconstitutional by the High Court of Cassation and Justice and by the National Liberal Party (PNL). PNL, UDMR, The most controversial stipulations refer to the magistrates’ responsibility in case of judicial errors, to limiting the role of the country’s president in appointing the Prosecutor General and the heads of the main prosecutor’s offices and the setting up of a special division for the investigation of magistrates. The Power continues to defend these laws, saying they bring order to the justice system and leave less room for abuse.


    Salaries, economy and taxation


    Promised by the Social democratic Party (PSD) in the election campaign of 2016, the unitary pay law in the public system became reality by mid-2017. Promoted by its initiators as a means to put order in a salary system that dominated the public sector years on end, the law was criticized, however, by some trade unions, for failing to reach one of its main purposes, namely that of bridging the gap between the salaries of public servants. The law also provided for significant pay rises in the public system.



    The risk of major state budget imbalances was big, so the government came up with the solution of transferring from employers to employees the responsibility of paying most of the social security contributions. As a result, the civil servants’ real salaries go up by very little, if any, while those of the private sector employees end up going down, unless employers increase gross salaries to cover the contributions’ increase. Except for the ruling coalition, everybody, from employees to employers, is criticizing the so-called fiscal revolution.



    Mayors have their share of discontent, as the new fiscal code stipulates smaller income taxes, which results in fewer funds for local budgets. The debate around the pay law and fiscal changes overlaps a more comprehensive one, regarding the 6% economic growth that makes Romania number one in the EU in this respect. Experts, however, fear that an economic advance generated mostly by consumption of imported goods is unhealthy and that it should be supported by public investment.



    The death of King Michael I


    December 5, 2017 was the day when Romania’s last sovereign, King Michael I, died in Switzerland aged 96. The coffin was flown to Romania and, on December 16, King Michael was laid to rest in Curtea de Arges, in the royal necropolis at the Medieval Christian Orthodox church there. At final rest there are also his wife, Queen Anne, who passed away in 2016, as well as his three predecessors, Carol I, Ferdinand, and Carol II.



    King Michael’s funerals were attended by royal figures, heads of state and government and foreign politicians. The late king was paid homage to by thousands of people, in an emotional show of respect for his extraordinary personality. Spectators, against their will, of the public show displayed by an immoral and incompetent political class, Romanians understood that, with King Michael’s death, Romania’s reserve of dignity decreased dramatically, which makes the sovereign’s death irretrievable.



    By way of conclusion


    2017 was a complicated year. The leftist power ruled the country on behalf of a majority, who is now silent, who had given it their vote in 2016 and whom it did not hesitate to invoke every time the measures it promoted, especially the ones regarding the justice laws, were contested vehemently in the street by the Opposition and the President, by relevant institutions and by Romania’s main partners. Independent commentators emphasised again, in 2017, the political majority’s total lack of transparency in passing their laws.



    The rude and offending behaviour became an informal legal instrument in 2017, a year when Parliament was the least credible and most unpopular state institution. 2018 does not look like an easy year either. The same commentators anticipate that, after having amended the justice laws in the sense of imposing political control over the justice system, the Power will try to operate changes in the Criminal Code and the Criminal Procedure Code, something that will make the battle against offenders much less effective. Will 2018 be the year of a Romania without justice? Probably not. It will surely be, however, Romania’s first year without its King. (Translated by Elena Enache)


  • August 27, 2017 UPDATE

    August 27, 2017 UPDATE

    EMA – Romania stands a chance to host the European Medicines Agency, EMA, the Romanian minister delegate for European Affairs, Victor Negrescu said on Sunday. According to Negrescu, the relocation of the agency in Bucharest from London, after Brexit, would bring significant advantages to Romania. Minister Negrescu has also added it is important for all Romanian officials to support Romanias candidacy, also by pursuing an intense diplomatic campaign. Romanias capital city is competing with 18 cities, including Amsterdam, Bonn, Brussels, Dublin, Milan, Stockholm, Vienna, Warsaw, Sofia and Zagreb. With 900 employees, the European Medicines Agency is a decentralised body of the EU, responsible for the protection of public and animal health through the scientific evaluation and supervision of medicines.



    REP. OF MOLDOVA – The Republic of Moldova, a former Soviet country with a predominantly Romanian speaking population on Sunday celebrated 26 years since it proclaimed its independence. On August 27, 1991, after the failure of the Neo-Bolshevik coup in Moscow, Parliament, picketed by hundreds of thousands of protesters voted the declaration of independence from the Soviet Union of the republic set up on the Romanian territories annexed by Stalin in 1940. On the same day, Romania was the first country in the world to recognise the independence of its new neighbour. On Sunday, the Romanian Foreign Ministry reiterated Romanias wish to support the Republic of Moldova on its European path, as well as all its citizens. After the signing in 2014 of association and free trade agreements between Chishinau and Brussels, Moldovan citizens can travel freely to the EU, and firms can export and sell their products on the community market in advantageous conditions. At present, the coalition government led by PM Pavel Filip continues to be a promoter of Moldovas EU rapprochement, whereas the pro-Russian Socialist president, Igor Dodon, wants the republic to return onto Moscows orbit.



    THE ROMANIAN LANGUAGE DAY – Preparations for the Romanian Language Day, celebrated on August 31, started in the communities of Romanians living outside the borders of the country. The main organiser of the event is the Eudoxiu Hurmuzachi Institute for the Romanians Around the World, subordinated to the line ministry. The series of events continues until September 6. They are aimed at promoting Romanian language and identity in the historical Romanian communities in neighbouring Serbia, Bulgaria and Ukraine. Initiated in 2013 by the Romanian Parliament, the Romanian Language Day overlaps the national holiday of the Republic of Moldova, and is an homage to the national awakening movement in the neighbouring state with a predominantly Romanian speaking population. On August 31, 1989, during the Soviet regime, the Moldovan Parliament, picketed by some 750 thousand people, accounting for one sixth of the republics population, decided to declare Romanian the state language, also adopting Latin script instead of the Cyrillic one, imposed by the occupiers after the armed annexation of 1940.



    MIGRANTS – The Romanian border police have stopped six Iraqi citizens while trying to illegally cross Romanias border with Hungary. They were asylum seekers in Romania and declared their intention to reach a country in Western Europe. According to the Border Police Territorial Inspectorate, a surge in the illegal migration attempts has recently been registered along Romanias western border. This week, border police officers found over 100 migrants, of which 42 children, in a guest house in Timisoara. Most of them came from Serbia and tried to cross the border into Hungary and then to continue their way to Western Europe.



    PARIS –France and Germany are expected to propose a new tax on Internet Giants in September. The announcement was made on Sunday by the French finance minister, Bruno Le Maire, who claims these companies, mostly American should pay a fair contribution to the public finances in the countries where they earn money. The French official said that at the future Council of the EU finance ministers a new proposal will be made to tax “GAFA, the acronym for Google, Apple, Facebook and Amazon. According to FP, thanks to their profile and field of activity, the Internet giants are champions of fiscal optimisation through financial arrangements which reduce the taxes they pay in Europe.