"The flat tax rate goes down from 16 percent to 14 percent as of January 1, 2019, both for incomes and for profit," said Valcov.


He explained that the net budgetary impact for 2019 is estimated at 2.5 billion lei, and the additional economic growth will be 0.5 percentage points.


The measure is expected to bring about a decrease of 4.8 billion lei in the 2019 budget revenues — an amount that will remain at the disposal of private companies — but a supplementary 2.3 billion lei will be generated in the same year from VAT collections, social contributions, payroll tax, etc., shows government data.


As far as the medium-term benefits for the economy are concerned, apart from the additional economic growth of about 0.5 percent, the authorities estimate an increase by about 50,000 in the number of jobs, additional funding sources for businesses and a 1.1 percent increase in investments.


The arguments cited in support of the flat tax are the change in the behavior of the business milieu by the broadening of the tax base, heightened voluntary compliance with budget liabilities, better recovery of arrears. (Source: actmedia.eu)