Reactions to the amended Fiscal Code

The Romanian Government has adopted, under an emergency decree, a set of amendments to the Fiscal Code, which are due to come into force in 2018.

Leyla Cheamil, 09.11.2017, 13:20

Undisturbed by the street protests staged in Bucharest,
the Romanian Government adopted on Wednesday the so called ‘fiscal revolution’,
consisting in measures that have made many people unhappy, including trade
unions, businesses and mayors of big cities. Romania’s president Klaus Iohannis
has also criticised the decree.

According to the new, amended Fiscal Code, as of
2018, all social security contributions will have to be paid by employees, and
the income tax will drop from 16 to 10%. Also, companies will have to pay a
contribution of 2.25% of the total salary fund. Other measures are aimed at
preventing multi-national companies from taking profits out of the country.
Also, contributions to the second pillar of the private pension fund have been
reduced, from 5.1 to 3.75%. At the same time, as of July 1st next
year, the minimum pension will increase by 26 Euro, and the pension point will
grow by 22 Euro.

Despite general opposition to these amendments, the
Finance Minister Ionut Misa claims that the measures will benefit significantly
both citizens and businesses. Ionut Misa:

One of the measures is aimed at lowering the income
tax from 16 to 10%. Also, social security contributions will drop by 2%, and
the payment of such contributions will become employees’ responsibility. All
these measures, aggregated, will translate into an increase in the employees’
net incomes, without forcing employers to pay more to the state budget.
Contributions to the pensions fund will grow, and therefore people will benefit
from higher pensions upon retirement.

Prime Minister Mihai Tudose says that some of the
measures included in the new Code will bring more money to the state budget,
which will be spent on education, health and infrastructure. Tudose believes
that the new fiscal measures are a matter of discontent for multi-nationals,
which have in turned fuelled that of the public opinion. The liberal
opposition, on the other hand, has harshly criticised the changes to the Fiscal
Code. Here is the Liberal senator Florin Catu:

We must all stand against this, because we can
already see the effects: interest rates have gone up, the national currency has
been growing weaker for ten months now, with a big drop yesterday, inflation is
on the rise, and the signals that we get from the Central Bank are worrying.

The Liberals have announced they will file a
no-confidence motion against the Government made up by the Social Democratic
Party and the Alliance of Liberals and Democrats in Romania. In turn, all big
trade-union confederations have stressed that these changes will in reality
lower people’s incomes and have announced that protests will continue across
the country. They will also call on the Ombudsman to help block the
incriminated decree.