Romania's largest companies, such as Dacia, OMV Petrom and all the retail chains, will pay a 1% 'solidarity' tax on turnover if the Social Democrats (PSD) succeed in seeing their proposal backed by the ruling coalition.

The tax would be levied on companies with annual revenues in excess of EUR 100 mln.

It was initially contemplated by PSD at the end of last year when it was estimated to bring RON 5 bln (EUR 1 bln) to the budget.

If applied as of January 2023 with the same threshold, it is going to be levied to a larger number of companies and may generate more revenues not only nominally, but also in real terms or as a share of GDP.

This week, the PSD leader, Marcel Ciolacu, declared that the turnover tax "is on the agenda", and, according to Profit.ro, at this moment there is already an agreement among the Social Democrats.

"I said that the solidarity tax exists in Germany. It is on the agenda, and we will choose the best option. Just as it is in Germany," said the Social Democrat leader Marcel Ciolacu recently.

Nevertheless, the Liberal Party (PNL) is expected to argue against it, and for good reason. The poor tax collection cannot be addressed by levying yet another tax on companies that is easy to be collected.

Experts reached a consensus on the first steps the Government must follow if it wants to boost revenues - besides fighting the tax evasion - namely eliminating all the loopholes and preferential regimes that allow natural and legal persons to avoid the so-called 10% "single tax rate."

(Photo: Shutterstock)

iulian@romania-insider.com