Romania’s new Finance Minister Viorel Stefan will have the most difficult job of all the ministers in the Sorin Grindeanu cabinet as he will have to find a way to cut and eliminate some taxes and allot money for wage and pension increases while keeping the budget deficit under 3% of the GDP.

Stefan said that he’s been thinking permanently on how to increase the budget revenues since he received the nomination for the minister's office some days ago.

“I go to sleep at night and wake up in the morning with this question in mind,” he said during the hearing in the Parliament’s budget and finance committee on Wednesday morning.

He hopes that an economic growth of 5.5% per year and high EU funds absorption would help him fulfill his task.

The new PSD cabinet has probably the most generous governing program in Romania’s recent history, which includes tax cuts and income increases for all social categories. Viorel Stefan presented some of the measures to be taken in the next year, which include cutting the individual income tax from 16% to 10%, starting January 1, 2018. Moreover, Romanians will no longer pay income tax for salaries below RON 2,000. A similar measure that removes the income tax for pensions under RON 2,000 will be approved in the following weeks.

The Government will also reduce the VAT rate for the sale of houses of less than EUR 100,000 and for publicity to 0%, starting March this year. Moreover, the new finance minister will try to have all the taxes paid online. “The taxes that can’t be paid online will be cancelled,” he said.

Viorel Stefan also promised that the tax legislation will be unified this year under an economic code that will be completed mid-2017 and will enter into force on January 1, 2018. The code will include maximum 50 taxes.

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editor@romania-insider.com