Policy Proposal: PSD outlines vision for a new fiscal system rooted in equity and social solidarity

June 16, 2022

PSD has outlined its vision for a reformed fiscal system that should underpin the reform of the Romanian tax system prioritizing principles of equity and social solidarity to ensure that all Romanians may prosper.

PSD will submit the following proposals for debate within the governing coalition:

1) 40% surtax of the amounts from salary income within the budget system that exceed the salary of the President of Romania;

2) 40% surtax on pension income exceeding the threshold of 9,000 lei (five times the average net pension) and 90% on pension income exceeding 18,000 lei (ten times the average net pension);

3) Application of a progressive deduction system for salaries below 4,500 lei, to reach at the minimum salary level a tax of 0%;

4) A temporary contribution of 0.5% of turnover paid by companies with annual revenues over €100 million to support health and education.

PSD opposes lowering the threshold for the inclusion of SMEs from €1 million to €67,000 in revenue, as proposed by the former government when negotiating the National Recovery and Resilience Plan of Romania.

At least in the first phase, this threshold cannot be lower than €500,000 so that most of these companies continue to benefit from a favorable tax regime (tax of 1% of the turnover) to encourage strong economic development. Currently, around 100,000 SMEs in Romania have an annual turnover between €67,000 and €500,000.