Romania To Collect New Taxes To Increase Budget Revenues

Romanian Finance Minister Sebastian Vladescu said the country will apply a 16% tax on income gained from copyright, stock activities, the interest generated by bank deposits, mandate contracts, as well as on authorized individuals, newspaper Gandul reported.

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Vladescu said in an interview for public television Pro TV, cited by Gandul, the new taxes will be applied starting June 1 or July 1, 2010 at the latest.

The minister said that, if the Justice Ministry rules in favor of those who oppose salary reductions, Romania will not be able to pay salaries and pensions.

Romania and the IMF have agreed on a budget deficit of 6.8% of GDP in 2010, from an initial target of 5.9% of GDP, and the country must implement a series of cost cutting measures, such as reducing subsidies and slashing the public sector salary fund by 25% and pensions by 15%.

The IMF will only disburse the fifth tranche of the EUR13 billion stand-by agreement after the government implements these measures.

Joint teams from the IMF, EU and the World Bank were in Bucharest until May 10 for the fourth review of Romania's progress under a loan agreement. Romania's loan agreement with the IMF is part of a larger EUR20 billion package that includes funds from the European Commission, the World Bank and other foreign lenders.

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