Fiscal & Political Report (May 31 - June 07, 2024)

Political Updates

Internal Affairs

CITIZEN’S GUIDE FOR THE JUNE 9 ELECTIONS. This Sunday, on June 9, the European parliamentary and local elections will take place in Romania, two of the four held this year. Romanians will choose their politicians to represent them in the European Parliament, as well as future mayors and members of local and county councils. Thus, those who will choose to exercise their right to vote in both elections, will have no less than 5 ballots for: (1) MEPs, (2) mayor / general mayor (for Bucharest) (3) district mayor (for Bucharest) / president of the county council (4) members of the local council, and (5) members of the county council.

The voting process will start at 07:00 a.m. and will end, for the first time, at 10:00 p.m. However, those who will be in the polling station at 10:00 p.m. and have not been able to vote will be allowed to vote until 11:59 p.m.at the latest. Romanian citizens can find out the polling station they are assigned to by accessing the Electoral Register and entering the Personal Numeric Code (CNP) and surname. Instead, for the diaspora, the Ministry of Foreign Affairs has published the complete list of polling stations abroad for the European Parliament elections on Sunday, given that they will not vote in the local elections.

In local elections, citizens can only vote at the polling station where they are assigned according to their domicile or where they have their residence established 60 days before the elections. Thus, those who have changed their home addresses and/or have floating visas issued after April 11, 2024, will not be able to vote in the local elections. On the other hand, in the European elections, you can vote in any section in the country or abroad. For those who vote in the country, it will be possible to vote with the identity card or other equivalent document, but not with the simple passport. On the other hand, Romanian citizens abroad will be able to vote with any official and valid document certifying their identity.

Given the large number of ballots, voters will also be given stamp holders with ink. On the other hand, voters are not allowed to enter the polling station with alcoholic beverages, guns, and they cannot take a picture with the ballot paper or talk to those in the adjacent booths.

Finally, on the day of voting, the public opinion will be informed on the voter turnout in real time, for each polling station, on the special website of the Permanent Electoral Authority. According to the electoral register, there are almost 19 million Romanians who have the right to vote on June 9, and about a million of them are voting for the first time.

The lists with the candidates who will run in the local elections can be found here.

The lists with Romania’s candidates for the European elections can be found here (political parties and alliances) and here (independents).

External Affairs

EUROPEAN ELECTIONS – WHY DO THEY MATTER? Between June 6 – 9, depending on each Member states, citizens of the European Union (EU) are choosing the future of the Union for the next 5 years. It is when they choose their national representatives for their European Parliament – the MEPs, which represent the interests of EU citizens at the European level. The results of this elections will also influence the election of the European Commission. Moreover, the MEPs decide on new EU laws, adopt the EU budget, elect the President of the European Commission and appoints the future Commissioners. Shortly after the elections, the future MEPs will form political groups and, within the first plenary session, the European Parliament will choose its President. After that, it will also elect the new President of the European Commission who shall take time and choose their team – the Commissioners, who will be heard by the Parliament’s Committees and afterwards, approved. The new European Commission is then appointed by the European Council.

This year, no less than 720 MEPs will be elected, with 15 more compared to the 2019 elections. The number of MEPs elected from each EU country is based on the principle of degressive proportionality - an MEP from a larger country represents more people than an MEP from a smaller country. Romania ranks 6th, with 33 MEPs, Malta has the fewer representatives – only 6, while Germany gives the most MEPs – 96 (also the maximum mandates/country allowed). The election results will be reported live on a special website – the election results website.

According to the data analysed by the Euronews Polling Centre, the citizens of the Union are concerned, this year, with two major themes, which they hope the new European Parliament will take care of - economic stability and European security and safety. We shall see whether the future MEPs will indeed respect these wishes and focus on ensuring a stable economic climate and a safe Union from all points of view.

Fiscal and Economic Updates

Overview

ROMANIA, NOT READY FOR PROGRESSIVE TAXATION. Romania is not currently prepared to adopt a progressive tax system, at least this is what Liberal leader Nicoale Ciuc? says. His reason? The Romanian state does not have the necessary know-how to implement progressive taxation, nor does it have the appropriate level of digitisation of the National Agency for Fiscal Administration (ANAF). Moreover, Ciuc? reaffirmed the National Liberal Party's support for the single tax rate, stressing he is unsure about when future discussions on the implementation of progressive taxation at coalition level will occur. Therefore, we will most likely see the continuation of the current tax system, although the discussion on the implementation of progressive taxation has been going on since the pandemic, with the PSD declaring itself the main supporter of its eventual implementation.

MINIMUM WAGE INCREASES IN JULY. Government Decision 598/2024, which provides for a guaranteed gross minimum wage, excluding bonuses and allowances, of RON 3,700 per month from July 1, 2024, was adopted at yesterday's Government meeting. Along with the increase in the gross minimum wage, the non-taxable ceiling of the gross minimum wage will also be raised from RON 200 to RON 300 from July 1 until December 31, 2024, through the adoption of an GEO which is awaiting its publication in the Official Gazette. We remind you that this amount represents income from wages and salaries for which no income tax is due, and which is not included in the monthly basis for compulsory social contributions.

On the Recovery Plan

RO E-FACTURA. The representatives of the European Commission (DG GROW) came to Bucharest and underlined that Romania has made an important progress in the implementation of the reforms undertaken in the NRRP, considering that the implementation of the RO e-Invoice system was also a fundamental step towards reforming the tax system. Thus, the EC representatives considered that the decision to adopt the European Invoicing Standard is the right one, given that the EU perspective is to ensure interoperability and increase the speed of data exchange in real time.

SMES DIGITALIZATION & ENTERPRISE LISTING. The Ministry of European Investment and Projects announced the start of the implementation of the project "Aid scheme for SMEs’ digitalization", in partnership with the National Institute for Research and Development in Informatics - ICI Bucharest. Also, the same ministry published the Applicant Guidelines for "Enterprise Listing on the Stock Market". This call for projects will have a total budget of €38.27 million and will be open from June 7, 2024, to May 31, 2025.