Romania drafts fiscal amnesty bill to address rising budget deficit
<p>Romania’s government published a draft emergency ordinance for consultations, envisaging partial fiscal amnesty for individuals and companies with unpaid taxes as of August 31, as well as 3% bonuses for those paying their taxes on time this year.</p>

<p>The government estimates the measures to have a net budgetary impact, largely resulting from the recovery of claims against taxpayers, of nearly RON 10 billion (EUR 2 bln, 0.57% of GDP) this year, according to the note published along with the draft emergency ordinance.</p>

<p>The government explains that this measure is necessary in the context of the budget deficit topping 4% of GDP in January-July against an initial full-year target of 5% of GDP and the economic growth failing to meet expectations. The new Pension Law and the higher budgetary sector payroll put more pressure, estimated by the European Commission to result in a 6.9%-of-GDP gap in the full year.</p>

<p>Under the provisions of the draft emergency ordinance, all taxpayers (natural or legal persons) who pay the principal as of August 31 will be written off the interest and penalties. The measures regard all dues to the general government budget.</p>

<p>Supplementary, the natural persons, including those registered for business purposes (freelancers, liberal professions) owing under RON 5,000, are written off 50% of the principal while those owing more than RON 5,000 only &nbsp;25%. This measure regards only the dues owed to the central government budget.</p>

<p>The 3% bonification for the good taxpayers regards the payments to the central government budget.</p>

<p>The move is aimed at recovering part of the RON 175 bln (EUR 35 bln) principal, interest, and penalties owed by individuals and companies to the general government budget, as well as encouraging good taxpayers.</p>

<p>The government estimates that the taxpayers still active, not under insolvency or bankruptcy procedures, owe some RON 71.8 bln (EUR 14 bln) &nbsp;to budget, out of which RON 60.5 bln principal and RON 11.3 bln in interest and penalties – therefore could in principle be recovered.</p>

<p><em>iulian@romania-insider.com</em></p>

<p><em>(Photo source: Inquam Photos/Octav Ganea)</em></p>