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Romanian PSD leader Liviu Dragnea unveils tax overhaul plan

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Staff Writer | October 13, 2016
Liviu Dragnea, leader of the Social Democratic Party of Romania (PSD), has launched ambitious plans to lower taxes and ease fiscal policy.
Liviu Dragnea
Romania   The chance to live a decent life in the middle class
Tabling a bill in the Senate to eliminate 102 nuisance taxes and charges, Mr. Dragnea said the plan is part of his party's economic program intended to grow the middle class and put more cash into people's pockets.

In recent days Dragnea has unveiled policies to reduce Romania's flat income tax to 10% from the current 16%, and eliminate it altogether for those earning 2,000 lei (approximately EUR 440) per month. Simplification and reductions in various social taxes are expected to bring them to about 35% from 39%.

Dragnea remarked, "The PSD wants to bring more and more people out of poverty into the middle class. The reduced taxes and elimination of bureaucracy that we have championed are the catalysts that create higher living standards, and we have put those pro-growth policies at the center of our economic program because we dare to believe in Romania!"

Dragnea said putting more money into people's pockets was the key to growth and development. "We want to raise the minimum gross salary to 1,750 lei in 2020, increasing the number of persons employed full time to 5.6 million people and implement a gradual increase in the pension to 1.400 lei.

"These are not only steps to bring people the chance to live a decent life in the middle class. These are measures to accelerate business processes and help growth continue so that we get more money for the budget."

Dragnea said the costs will be covered by a combination of increased tax revenues arising from economic growth and higher incomes and from revenues paid by the planned new Sovereign Fund for Development and Investment, announced Sept. 22.

The PSD president anticipates reducing the budget deficit as a percentage of GDP from the current 2.9% to 2.0% in 2020, with total budget revenues rising to 300 billion lei in 2020, up from 231 billion lei in 2016.

The least costly part of the tax program, the elimination of some 102 user charges and other fees, is expected to have a profound impact on the lives of ordinary citizens.

"These taxes are 0.1 percent of the GDP, but take 30% of our time," Dragnea said on national TV.

Among the fees and taxes to be eliminated are those for environmental stamps for vehicles, 33 different fees for various consular and citizenship services, radio and TV taxes, 22 different fees for changing or replacing identity documents and a tax payable for the retrieval of a criminal record certificate.

Dragnea said all such "non-fiscal taxes" represent for Romanians having to queue to pay them "lost time and humiliation."

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