Tax shake-up proposal would hike taxes on cigarettes, fuel and alcohol

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The tax reform just sent to ministries and partners for review supposes raising a number of taxes, including those on fuel, cigarettes and alcohol, says the reform draft outlining the 2018-2021 tax policy. 

Under the plan, the tax on unleaded fuel would rise 7.8% in 2018. While the tax on unleaded fuel is to jump 24%.

Likewise the tax on diesel fuel would rise by 11% and that on liquid petroleum by 12%.

While the tax on cigarettes would grow 5.5% but wine and beer might be taxed 18% and 24% more starting March 2018.

A tax shake-up by the Finance Ministry proposes to reform labor taxes, introducing a personal income tax at 20% for income of up to €45,000 a year, and a tax rate of 23% on income above €45,000 a year.

The minimum wage should be raised to €430 a month, and the solidarity tax on high earners should be abolished.

The ministry proposes to apply 20% corporate tax on distributed profit.

The ministry explains that if at the moment a person receives €910.50 a month as a gross wage, it ends up as €641.30 as a net wage, while after the proposed labor tax reform, the net wage would amount to €680.90.

The Finance Ministry has proposed changes in capital tax, setting a 20% income tax on distributed profit, and 0% tax on reinvested profit.

The value added tax (VAT) would remain at 21%.

The ministry has also prepared proposals in relation to microenterprise tax. The ministry proposes to retain the microenterprise tax system, reducing the maximum turnover from the current €100,000 to €40,000 a year.

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