Romanian Social Democratic Party demands tougher tax rules for multinationals and new turnover levy

Romania’s Social Democratic Party (PSD) is pushing for stricter tax regulations targeting multinational companies and a new turnover tax as part of ongoing fiscal reform negotiations within the ruling coalition. Interim party president Sorin Grindeanu warned that the PSD could exit the coalition if its key proposals are not accepted, although he described the alliance as “rather stable”.

“We are the only left-wing party in a right-wing coalition. It is an abnormal coalition in an atypical situation. It is neither on the brink of a collapse, nor are there disagreements,” Grindeanu told Observator on July 16.

Among the PSD’s key demands is the introduction of tighter transfer pricing rules aimed at limiting profit shifting by multinational companies operating in Romania. The party also seeks a 0.5% turnover tax to be applied to all companies, in addition to existing corporate tax obligations.

The measures are intended to be part of the government’s second package of fiscal reforms, expected by the end of July, according to Prime Minister Ilie Bolojan. Some PSD demands are reportedly included in this second round or a third package still under preparation.

Grindeanu also called for revisions to the initial fiscal package, which includes changes to social contributions. He insisted that certain groups – including war veterans, former political prisoners, and mothers on parental leave – should be exempt from paying contributions to the public health system, a provision that was already partly addressed.

“You can’t ask from those with low and medium incomes, as a first move. You can’t convince me that we are closing the deficit with the health system contributions paid by the political prisoners. Or for war veterans,” Grindeanu stated.

Romania is under pressure to narrow its budget deficit, which is expected to exceed 5% of GDP this year. The proposed tax measures are part of wider efforts to increase revenue without disproportionately affecting low-income earners.

iulian@romania-insider.com

(Photo source: Inquam Photos/Sabin Cirstoveanu)