Romania’s Finance Ministry launched into public debate a draft emergency ordinance for simplifying tax legislation.

This provides, among others, that garnishment on a taxpayer’s accounts can only be applied for the amounts owed to the state and not the whole sums in those accounts. The draft also introduces a special VAT system for farmers.

The measures would have a negative impact on the budget of around EUR 100 million next year, EUR 167 million in 2018, and some EUR 216 million in 2019.

The package adopted by the Finance Ministry expands the number of documents accepted as proof of payment to the state institutions for payments through internet banking, mobile banking, and ATMs. A person who pays his passport taxes through internet banking can show as proof for the payment a print from the phone or computer, or can complete an affidavit with the payment details.

The draft law also introduces a special VAT system for farmers starting January 1, next year. The farmers will get a gradual flat-rate compensation for their expenses, namely a compensation of 1% in 2017, 4% in 2018, and 8% in 2019. This is because farmers don’t collect VAT for the products they sell but pay VAT for the inputs they buy.

People with disabilities will also get some property tax reliefs.

editor@romania-insider.com