The levying of a 16% tax on all stock exchange earnings, withoutproviding any incentive for long-term investments, turns theRomanian market into one of the most expensive in Europe. Belgium,Turkey, and Croatia do not levy any tax on earnings made fromselling shares, while Germany and Portugal do not levy taxes onshares held for over a year.
The new taxation system targeting individuals' earnings on thecapital market makes the Romanian market one of the most expensivein the region, with the Government continuing to discourage StockExchange investments in a bid to collect a few more million RON tothe budget. The levying of a 16% tax on shares held in one'sportfolio for over a year, as opposed to the current 1%, coulddiscourage long-term Stock Exchange investors, and would implicitlyhave a negative impact on the future public offerings to beconducted on the Stock Exchange. This comes in the context wherethe Government is planning to sell several stakes in energycompanies in view of raising funds for investments, so it shouldseek to attract more investors to the market instead of drivingaway the few that are there.
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