Gov't adopts final version of ordinance amending Tax Code

  The government adopted on Friday the final version of the ordinance amending the Tax Code; certain measures will come into force at the beginning of August, Finance Minister Adrian Caciu announced at the briefing that followed the Executive's meeting."Today we adopted the final version of the ordinance on the Tax Code amendments. Certain measures will come into force on January 1, 2023 and others are to come into effect on August 1, 2022. I will emphasize this balanced approach to the fiscal reform, because there have been calls from the public environment for a more radical approach. The government considered that given the complicated situation we are facing, making radical adjustments to the fiscal environment would not be advisable now, and chose to continue its trajectory of supporting the business environment and consolidating the honest businesses," the Finance Minister underscored.He considers that certain long-delayed fiscal measures have caused Romania's entry into an excessive deficit procedure in 2020."We announced as early as the beginning of this year that this reform will take place. A balanced adjustment, from our perspective, between the need to further support the economy and the citizens and protect, if you will, the Romanian capital, but also the employees' incomes while continuing to sustainably ensure a medium-to-long-term fiscal-budgetary balance. Following the preliminary dialogue we had with the business and the associative environment, but also as a result of the political discussions within the coalition, a series of decisions were taken which were presented in decisional transparency for the amendment of the Tax Code, and debates continued this week with the business environment; a series of adjustments were made at their request (...)," Adrian Caciu mentioned.The changes to come into effect on August 1 include an increase in tobacco (heated tobacco included) and alcohol excise duties, the reduction of the threshold for the grant of fiscal facilities in the food and construction industries from 30,000 RON to 10,000 RON, the cancellation of certain deductions for real estate transactions and the return to real value taxation.Other amendments to the Tax Code, applicable from January 2023, refer to a 1 percent turnover tax for the HoReCa sector, thus eliminating the specific tax, and the lowering of the threshold for micro-enterprises to 500,000 euros. The dividend tax will rise to 8 percent from 5 percent at present.The VAT rate for beverages with added sweeteners or sugar is planned to increase to 19 percent, while for restaurant, accommodation and catering services the VAT rate will return to 9 percent.According to the latest version of the draft ordinance amending the Tax Code, published by the Finance Ministry this week, the financial impact on the revenue side is 1.19 billion RON this year and over 10.5 billion RON next year.