The leading parties of Romania’s ruling coalition reportedly disagree over a “solidarity” turnover tax for the large companies, which could finance the supplementary social spending advocated by the Social Democrats (PSD).

The “solidarity tax”, initially proposed by the ethnic Hungarian party UDMR and backed by the Social Democrats, consists of a 1% tax levied on the revenues of companies with a turnover of EUR 100 mln or higher, Profit.ro reported. This is expected to bring to budget some EUR 1.6 bln (0.7% of GDP) per year.

The Liberal Party (PNL) reportedly rejects such a tax, as well as the supplementary social expenditures advocated by the Social Democrats.

At this moment, the Ministry of Finance is controlled by the Social Democrats, while prime minister Nicolae Ciuca at least formally represents the Liberals.

Both members of the ruling coalition reportedly agreed, prior to forming the alliance, over a package of social expenditures estimated to cost the budget some 1% of GDP in 2022.

The Social Democrats reportedly plan to supplementary raise the wages in the sectors of education and health system - which prompted negative reactions from the Liberals, according to G4media.ro.

The Social Democrats also want to levy a special tax on “extraordinary revenues” of large size, PSD president Marcel Ciolacu confirmed. He didn’t provide many details., though. 

andrei@romania-insider.com

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