Prime Minister Nicolae Ciucă said on Wednesday that the leaders of the governing coalition have discussed of a possible 16% surtax on the incomes of state employees that exceed the president’s salary.

Asked by journalists how the 16% rate was arrived at, Ciucă said that „this is the one that works at the moment and as the actual tax on the finance law”. It is not clear what Prime Minister Ciucă was referring to, given that the income tax is currently 10%.

Ciucă avoided answering when asked if such a tax only for public sector workers is constitutional and said that „any measure we take must have legal backing”.

„We have decided that when Ministry of Finance has all the aggregated data, we will discuss it in coalition. There is no discussion on progressive taxaion. We are talking about a tax that at this point has been as well clarified as possible in terms of exceeding the state salary above that of the president (…) There is absolutely nothing set in stone, depending on the data we make the decision,” Ciucă added.

Background.

G4Media wrote exclusively that PSD leader Marcel Ciolacu proposed the introduction of this tax at Monday night’s coalition meeting.

A report by a team of World Bank experts, funded by the PNRR for the Ministry of Finance and consulted by Economedia and G4Media, recommends a complete reform of tax policy to the government. First and foremost, the expert team recommends moving to progressive taxation of employees and ending income tax exemption for employees in IT, construction and agriculture.

The paper by World Bank experts also proposes raising the tax on dividends to 10% (from 8% now), increasing property taxes and increasing taxation on micro-enterprises, which they say distort the economic environment.