Gov’t approves fiscal amendments, gas and energy price capping, ‘tax on greed’ by emergency ordinance

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The Government adopted Friday evening the emergency ordinance on tax amendments. Finance Minister Eugen Teodorovici and Darius Vâlcov, adviser of Prime Minister Viorica Dăncilă, presented the main provisions of the normative act.

“A first decision is the proposal to set up a fund for the development of 31 spa resorts of national interest where we will provide the sum of RON 310 million. The goal is to modernize everything related to the infrastructure and also to endow them with modern equipment and train the medical personnel. One point is also to introduce a mechanism, to protect the population, for those who have assets in the case of a ROBOR Index higher than 2% (the so-called ‘tax on greed – our note). You all know, and we have here documents showing some unfair practices towards the population and the real economy,” Finance Minister Eugen Teodorovici said at the end of Friday’s Government sitting.

Darius Vâlcov, presented another set of provisions, including the gas price cap, the ANCOM tax of 3%.

The government has decided to cap the price of gas for household consumers, which will be a mix of the price of RON 68, the cost price and the storage price. The Government will not earn money from these measures. On the contrary, it will fail to collect RON 1.52 billion.

– ANRE has been given the opportunity to find a methodology to freeze energy prices for a period of 3 years for household consumers.

– In the field of communications, a minimum level is set for the sale of 5G licenses.

– A minimum level of EUR 2.3 billion is set for 3G licenses. A fee of 3% has been set to be paid by ANCOM. It also comes as a result of an analysis on the behavior of those who have to pay the profit tax and was considered as incorrect.

– It was decided to increase the gaming tax by 2% on turnover.

– With regard to Pension Pillar II, contrary to some opinions, the contribution hasn’t been cut. It remains at 3.75%. The average monthly contribution per person was of RON 153 in 2017 and RON 159 for 2018.

Finance Minister Eugen Teodorovici was asked how he sees the fact that the Ministry of Justice formulated 72 objections to the text of the Emergency Ordinance on fiscal amendments, and said that all the institutions involved have assumed the measures, including the Ministry of Justice and the Competition Council.

Teodorovici said he trusts foreign investors will not withdraw from Romania after the adoption of the emergency ordinance on fiscal measures. His statement comes as Austria’s Chancellor Sebastian Kurz said on Friday, at Cotroceni Palace, that the Austrian Government does not tell the companies what to do. But it is not excluded that some might leave the Romanian market.

Other decisions, as presented by PM Viorica Dancila before the Government sitting:

  • A programme for the construction of 1,000 kindergartens with sports programme, in partnership with the business environment, in the sense that the private companies and foundations that will build such kindergarten in the next 2 years will receive from the Romanian state up to EUR 500,000 when the investment is completed;
  • Another measure included in this GEO is to cap the price of gas and electricity for the next 3 years for household consumers;
  • the setting of a threshold of EUR 1 billion for the sale of 5G licenses, taking into account the experience of other EU countries, and the establishment of a minimum of EUR 2 billion for the extension of 3G licenses;
  • the establishment of a development and investment fund that will support the funding of local community and university development projects. Projects in areas such as health education, local development and infrastructure will be funded;
  • the increase, as of September 1, 2019 of the pension point and the minimum pension as follows: the pension point will increase from RON 1,100 to RON 1,265 and the minimum pension from RON 640 to RON 704;
  • wage increases for teachers set for 2022 will take place on September 1, 2020, as agreed in the document signed in Alba Iulia with the trade unions in education;
  • granting holiday vouchers in the amount of RON 1,450 in 2019 to all employees in the public sector;
  • the increase in the minimum wage in the construction sector to RON 3,000 as of January 1, 2019;
  • Cut by half of the labour taxes for the construction sector so that the net minimum wage in this sector exceeds the equivalent of RON 500;
  • to reduce the commissions on the administration of private pension funds from 2.5 to 1%;
  • to increase the ceiling on minimum heating aid from RON 614 to RON 750.

photo: gov.ro

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