Prime minister Marcel Ciolacu declared on April 8 that he would come up with an income taxation reform and a system of income tax deductions, "something exactly like it is in developed countries." Among the deductions, he mentioned special allowances for families with at least two children. 

"We have a problem with demographics, we have to take certain measures, we can't just sit and watch. (…) You have to come up with solutions, even if they are partial solutions. I told you that through the tax reform, I see, first and foremost, the fact that in the future, there must be deductions on the income tax," PM Ciolacu said, quoted by Cursdeguvernare.ro.

He also promised that specific services would be encouraged - such as private educational services, after-school, kindergartens, nurseries, and even private hospital institutions - through deductions and a national insurance system.

Prime minister Ciolacu did not mention whether the reform would include progressive taxation at the same time, but the system of deductions is typically associated with progressive taxation and the global income tax because both require similarly comprehensive reporting and technology. 

Until now, progressive taxation has been advocated by the Social Democratic Party, but it has been deferred indefinitely for technical reasons. 

iulian@romania-insider.com

(Photo source: Inquam Photos/Octav Ganea)