Romania's Social Democrat-led government scrapped a plan to introduce a so-called solidarity tax for top earners, after an assessment had shown it would not bring in much money, Prime Minister Mihai Tudose said on Tuesday.
Romania's Social Democrat-led government scrapped a plan to introduce a so-called solidarity tax for top earners, after an assessment had shown it would not bring in much money, Prime Minister Mihai Tudose said on Tuesday.
It was the second tax plan to be scrapped in a matter of days.
Last week, Tudose said his coalition government had dropped a plan to tax companies' turnover, due to sharply negative market reaction and criticism from centrist President Klaus Iohannis as well as local and foreign investors.
In late June, the ruling coalition had announced changes to major taxes due in 2018, including replacing a corporate flat tax of 16 percent on profit with a progressive tax on turnover.
The tax plans -- and a quickly ditched idea to end a mandatory, multi-billion private pension scheme for those under 35 -- beat down stocks and the leu currency.
"Today's conclusion is that we can treat this planned (solidarity) tax as 'discussed and forgotten'," Tudose told reporters.
"We won't enforce any measures that could be a burden to the population's budget. In this specific case, the disturbance was too great (to worth being enforced)."
Other tax measures the government was considering in June included a cut in income tax to 10 percent, and a move to cut social security contributions by 4.25 percentage points to 35 percent and have only workers, not their employers pay them.
It was unclear when or how these changes would come in.
Tudose reiterated the government's commitment to keep the 2017 budget gap at or under EU's ceiling of 3 percent of GDP.
Loose fiscal plans have worried the European Commission and the International Monetary Fund over missing budget targets. The Commission expects Romania to run the European Union's largest deficits this year and next at around 3.9 percent.
(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)
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