Gov't passes Tax Code, Code of Tax Procedure

The Government on Wednesday passed a new Tax Code and a Code of Tax Procedure. The main tax policy decisions regard cutting the Value-Added Tax (VAT), cutting the social security contributions, taxing microenterprises stimulatingly, repealing the dividend tax, cutting the flat income tax, cutting excise tax, repealing the tax on special structures, as well as establishing a framework for local rates and taxes.

Photo credit: (c) Liviu SOVA / AGERPRES PHOTO

As far as the VAT cuts are concerned, it is about adjusting the standard value on all goods and services from a current 24 per cent to 20 per cent starting January 1, 2016, as well as downwardly adjusting the VAT on livestock and live fowls of domestic species, meat, fish, dairy products and sub-products, fowl eggs, edible fruit and preparations thereof, from a current 24 per cent to 9 per cent as from January 1, 2016.

The new Tax Code also mentions further VAT cuts from 20 per cent to 18 per cent starting on January 1, 2018.

At the beginning of the Government's meeting on Wednesday, Prime Minister Victor Ponta said that the cuts in the social security contributions is the best job creation measure that will be followed by "capping at 5 average gross wages the monthly basis for the computation of the healthcare contributions, introducing the obligation on all income-gaining individuals to pay social security and healthcare contributions, as well as increasing the tax-free monthly amounts taken into account when setting the tax on pension incomes, as well as cutting the share of the social security contributions on employers and employees as from 2018."

About the repealing of the dividend tax, Prime Minister Ponta explained that the measure is designed to encourage ploughing...