"Romania is very much in need to switch to a progressive taxsystem applied on all incomes as of January 1st of 2011, pensionsincluded, in order for the state to continue to work, and the 2011budget will have to be built based on such a system," says FinanceMinister Sebastian Vladescu. In an interview to ZF, he says thecurrent 16% flat rate can no longer prop up the budget consideringrecession will exceed 1.5% of GDP this year, and amid uncertainprospects for 2011. The minister is working on a global incometaxation system, which will entail several tax brackets, withdeductions for private pensions and health insurance. He says inorder to stimulate consumption, the VAT will need to be cut in2011. The profit tax would likely fall to 15% next year in orderfor Romania to preserve its fiscal competitiveness, but Vladescuwill not give up the minimal tax on companies' revenues.
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