2005 brings fewer income tax categories

The taxation of the income of individuals will be modified as of next year, with only three of the current five income tax categories remaining. On Monday, the Finance Ministry state secretary Enache Jiru said the minimal taxation quota, 18%, would go down to a yet to be established level. He explained that these measures were being discussed with International Monetary Fund experts, and that talks should be over by the beginning of next week. Rates of taxation increase gradually at present, depending on the actual income. The tax quotas are 18%, 23%, 28%, 34% and 40%. The 18% tax-rate is levied on incomes of up to 2.4 million ROL, while a rate of 40% applies to incomes exceeding 13 million ROL. The main shortcoming of the current taxation system is that many taxpayers find themselves included in the upper tax bracket, even though their incomes exceed the lower category cap by just a small amount. This often happens when individuals have additional incomes, besides their main job. ZF