The government is preparing to adopt new tax measures, including increasing the taxation on dividends from 8% to 10%, taxing other forms of capital, and eliminating tax incentives for construction workers.
The measures, as reported by Profit.ro, have already been included in an official document drafted at the government level.
The dividend tax has been increased from 5 to 8%, but the rate is considered too low by both international financial institutions and social democrats.
Regarding the construction sector, currently, employees are exempt from personal income tax and a portion of mandatory social contributions, such as the contribution to the second pension pillar, is optional.
As for personal deductions, the government promises deductions for private health and education insurance in the coming years.
"Other measures included in the World Bank report on Romania's tax system are under discussion with representatives of the European Commission," the government document further states.
World Bank experts have recommended Romania to eliminate tax exemptions for workers in agriculture, construction, and the information technology (IT) sector, and to increase the dividend tax rate to 10% to align with the taxation of most other forms of capital income.
Another recommendation is to eliminate reduced VAT rates that were introduced for non-distributive purposes, such as reduced rates for restaurant food, accommodation, books, newspapers, magazines, museums, zoos, gardens, and parks.
In the longer term, a further expansion of the tax base related to the reduced rates introduced for distributive purposes, including the reduced rate for food, pharmaceuticals, water supply, and heating energy, is recommended.