The individual investors at Bucharest Stock Exchange (BVB) will pay only 3% interest on their capital gains (1% for shares held more than one year), according to a draft bill backed by MPs from all major Romanian parties.

Under existing regulations, the tax on capital gain is set in line with the "single tax rate" of 10%. Under the new bill, the investors will not have to pay the taxes themselves (instead, they will be paid by default on their behalf by the brokerage house) and will not have to declare their losses.

The draft law was drafted by the three Liberal (PNL) MPs, Sebastian Burduja, Gabriela Horga and George Tuță and the reformist MP Claudiu Mureșan, Economedia.ro reported.

The authors expect Romanians to move at least EUR 1 bln out of the EUR 30 bln net bank deposits held by the local households, while other EUR 1 bln would come from individual foreign investors encouraged by simplified and lower taxation.

The bill's authors estimate the supplementary profits generated by the listed companies as a result of the EUR 2 bln extra financing at some EUR 200 mln (per year).

It's a very simplistic estimate while the real benefit is twofold and mentioned in the document drafted by the initiators: cheaper financing available to Romanian companies and better allocation of the resources (with a positive impact on the households' budgets and their options for saving). 

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andrei@romania-insider.com