Finance Minister dangles tax carrot again

Finance minister Mihai Tanasescu has resumed promises about continuing the reduce the social security contributions (CAS) by three percentage points as of 2005, as well as the profit tax to about 20% along with increasing the dividend tax to 15% effective 2005 again. All these steps were included in the fiscal strategy the authorities devised for 2004-2006. “The strategy we set out to apply will see the payroll tax and social security contributions keep going down to a level matching that in the nearby countries, i.e. 43-45%,” Tanasescu said. According to the fiscal strategy pursued by the Finance Ministry, the Exchequer will come to acknowledge the deductibility of the losses from receivables uncollected as a result of a business partner going bankrupt up to 100% in 2007. “We will extend the acknowledgement of the losses incurred as a result of the failure to collect one’s debts due to the bankruptcy of a business partner from 20% in 2004 to 100% in 2007. We will also broaden the scope of the lower VAT to other goods and services set in the Directive 6th of the European Economic Community over the next two years,” Tanasescu said. ZF