EU Finance ministers will request Romania next week to consider increasing some taxes to improve the situation of budget incomes and draw new investments, according to a document quoted by Bloomberg.
A low level of taxes will not allow a reasonable volume of spending necessary to prepare for EU accession, the document says. It was drafted for the reunion of EU Finance ministers on May 5.
The same low level of taxation may lead to a worse fiscal balance if current favorable circumstances will end, according to the document.
Last year, Romania introduced a 16% flat tax to replace the personal income tax of 40% and the corporate income tax of 25%. But the measure led to a lower budget income volume – the lowest among EU member countries.
The EU ministers will also recommend Romania to control budget spending more tightly to keep control over the budget deficit.
Last week, the Romanian government reviewed its budget deficit target for 2006, up to 0.9% of the GDP – almost double than initially forecast. And Romanian authorities plan a 11% salary increase for public servants in 2006 after a 50% boost in 2005.