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August 18, 2022

Negotiations for PNL-PSD-UDMR government. PSD’s Grindeanu: We have come up with proposals to increase state revenues, first , ‘luxury’ tax

The Social Democratic Party (PSD) has made proposals to increase state revenues, including a “luxury” tax, during the negotiations on the government program, the party’s first deputy chair Sorin Grindeanu declared on Wednesday.

“Negotiations continue on areas of activity. Today’s first meeting was focused on what it means to lack budgetary resources at a time when the state must be by the citizens’ side, because we know, at this moment, and we can all see how the Romanians’ standard of living is decreasing, and we want to come with extra income to the state budget, not just to make expenses. We certainly want to increase minimum wage as of January 1, increase the minimum pension from 800 to 1,000 lei, raise the pension point by 11%, and the allowances to be in accordance with the law. For that we have come up with proposals that will be discussed in the next period to increase state revenues. The first of these would be related to the luxury tax, if we can call it that. All civilized countries have such a tax on luxury. You want a yacht, you pay extra,” said Grindeanu, at the Parliament Palace.

Adding that Romania has the lowest tax collection rate in the European Union, Grindeanu said that “It is absolutely necessary to correct this, we can also apply solutions which I see that our colleagues south of the Danube have applied, that they have brought in foreign experts and have rapidly increased the collection rate. A national effort is also needed to combat tax evasion. It is unacceptable that even now, for years, I give you an example – the scanners that the Romanian state itself bought are sitting unused, while smuggling is booming in Romania. Know that we do not agree with the elimination of facilities for research, IT and construction, the impact that we have calculated and that all these branches that have kept the Romanian economy going would be one that would not be good. There are some proposals, intentions that we presented today to our dialogue partners aimed at increasing the state revenues”.

According to the Social-Democrat leader, there is room for the pension increases proposed by PSD, “because we cannot continue to burden the population, we must also come with income increases, not only with price increases”, Agerpres informs.


PSD chair: Romania can not remain the last European country with the flat tax


On the other hand, the chairman of the Social Democrat Party (PSD), Marcel Ciolacu, stated, on Wednesday, that the Social Democrats have reached the conclusion that Romania cannot remain the last European country with the flat tax rate.

Asked at the Parliament Palace how the rediscussion of the flat tax rate and a progressive tax rate could look like and if the National Liberal Party (PNL) agrees to all this, Ciolacu said: “It would look like in the rest of Europe, in all civilized countries and with more developed economies than Romania. There are four countries left with the flat tax rate in Europe. I said very clearly that about the flat tax rate and replacing the flat tax rate there should be a joint program that we discuss next year to form the budget for the year after. (…) For the moment we reached the conclusion that we can’t remain the last European country with the flat tax. It’s the PSD’s conclusion.”

He mentioned that in Romania there should be, also, a return to “taxing large fortunes.”

“There is an immense discrepancy at this time in society between the rich and the poor. Let’s see the European practice, let’s let specialists come with these proposals and I believe that one year, such as the next, we have time to discuss the subject,” said the PSD leader.


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