Hey Flat Tax Geniuses, Your Plan Is Failing In Romania

Deflated Balloon

The Romanian government, after years of standing by it, is now considering moving away from its flat tax system.

They are considering a more progressive tax approach to take its place, according to Ziarul Financiar.

This change comes after the country’s Finance Minister Sebastian Vladescu called for a progressive tax to keep the country’s government running.

Currently, Romania runs a 16% flat tax.

Vladescu wants that to change by January 1, 2011, so that the country can combat receipt losses caused by its 1.5% fall in GDP this year.

Without a progressive tax, Vladescu is concerned receipts will not be equal to the costs of running the Romanian government.

Vladescu also wants to cut the VAT and the corporate profit tax, so it’s not all bad new for consumers and businesses.

But the country’s business elite is opposed to the flat tax end. And the Prime Minister, Emil Boc, has said that the finance chief has no authorization to bring up the end of the system.

Perhaps some would rather cut the size of government than take away the convenience of the flat tax.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.