Finance Ministry begins discussions on giving up the flat tax and implementing the household tax

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Representatives of the Ministry of Finance have begun talks with business representatives and tax consultants this week on the introduction of a tax on household, but also to eliminate the flat tax and introduce progressive taxation. The talks are yet in the first phase, focused on several working scenarios.

“It’s a mechanism of tax deductions for households, because currently the Tax Code does not include the concept of household or of family, as it is in other countries. There are attempts to redefine these concepts in fiscal terms,” sources close to the discussions have told HotNews.ro.

“In countries as Germany and France, where the maximum tax rate is very high, in order to sweeten the high level of fiscal obligations, there is deductibility that citizens can apply for various expenses – for children’s school, for various investments they make or even depending on the number of children they have. Our officials are trying to build a similar system, but the discussions are still at the beginning. I understand they want the statements of income per family or per household to be submitted and, if one spouse earns more and would fit in the maximum rate of taxation, to calculate an average household income,” a participant to discussions has told HotNews.

The new tax would be applied as of January 1 next year.

Also, according to our sources, all as of January 1 the flat tax could be abandoned and a progressive taxation mechanism is to be implemented.

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