Exchequer eyes dividend-related income

The single tax quota for the dividend-related income for both individuals and corporate bodies, raised to 20%, is one of the newest projects on the Finance Ministry’s drawing board.
A series of simulations to assess the influence of this measure on the budget are already conducted.
Individuals are currently paying 5% tax on dividends, while companies pay 10%.
The increase in this tax is part of the medium-term fiscal strategies presented to the IMF and EU experts last week.
This rise in the dividend tax is supposed to be compensated for by salary and profit tax cuts respectively.
Such steps are, however, hindered by Finance Ministry’s inability to improve revenue collection up to a level that would give it room enough to move and cut taxes without risking to see the budget plunge into a crisis.
“We are convinced that only a major fiscal relaxation backed by penalties to compel to the observance of the discipline in paying obligations can be the solution,” Maria Manolescu, state secretary within the Finance Ministry told Ziarul Financiar.
The Exchequer is also contemplating a possible reduction in the number of income categories subject to taxation – five at the moment, which are hard to manage, after all. The number of such categories could therefore go down to two or three, and help avoid a series of revenue losses allowed by the current system.
The project that will most likely materialise as soon as next year is bringing all the social security contributions together to form a single quota. If added up these contributions currently amount to 52%. razvan.voican@zf.ro