The flat income tax rate is emerging as a point of disagreement between the Liberal Party (PNL) and the Social Democrats (PSD), which kicked off negotiations to form a new ruling coalition.

After their meeting on November 9, the leaders of the two parties, Florin Cîțu and Marcel Ciolacu, expressed contrasting views on the topic.

The Social Democratic leader reiterated his party's intention to reconsider the income taxation system.

"In all developed countries, with more developed economies than Romania, [progressive taxation system] is enforced. Four states have remained with the flat income tax rate in Europe. (...) I think that next year we'll have time to discuss and come to the conclusion that we cannot remain the last country with a flat income tax rate," Marcel Ciolacu said, according to Realitatea.net.

Asked about this, PNL leader Florin Cîțu stated that he and the party strongly oppose it.

"In principle, PNL informed about the important elements [of the economic policy] for us, and we will not increase taxes in the next period. Reconsidering [the flat income tax rate] is not on the agenda. No taxation system that will lead to increased taxes will be accepted," Cîţu said.

PNL vice-president Cristian Busoi made it even more clear: the flat income tax rate is a red line for us, he told B1 TV station.

andrei@romania-insider.com

(Photo source: Facebook/Marcel Ciolacu)