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(E) Flat Tax - the way to go - in Romania
By Nenad N. Bach | Published  01/2/2005 | Business | Unrated
(E) Flat Tax - the way to go - in Romania


Tax as the first major step!

The 16% Flat Tax will be introduced in Romania on January 1, 2005.



Another Wake-Up Call For Croatia's Government and Finance Minister Suker -
Romania's New Reforms Lead To Increased Regional Tax Competition

Romania was certainly at a major crossroad and boldly chose the path to economic freedom and prosperity. The new Romanian government has promised speeding up reforms and introducing the Flat Tax of 16% as the first major step! The Flat Tax will be introduced in Romania on January 1, 2005.

(Please read enclosed Reuters report by Dina Kyriakidou on December 28, 2004 - found at the end of this text).

The economic outlook of Romania is promising as it courageously unleashes free market forces and moves toward to introducing greater economic freedom. This major step in the right direction sends a strong signal to potential investors around the world --- "Welcome to Romania: "Dedicated to implementing real reforms".

Romania certainly has much work ahead of them including strengthening the free market institution of the rule of law and eliminating corruption. From the evidences and experiences of leading Eastern European nations, the "flat tax" certainly augments the movement to eliminate corruption.

Wake-Up Call for Croatia's Finance Minister Suker and Economic Team
Croatia and its neighbors must realize that Estonia, Slovakia, Serbia and now Romania have increased tax competition in the emerging markets of Eastern Europe. In order for Croatia to move forward and advance free market reforms it should embrace the "International Leaders Summit's - Seven Strategic Recommendations for Economic Reform for Croatia"
( There is no need to reinvent the wheel and postpone implementing real economic reforms.

Finance Minister Ivan Suker of Croatia and his economic team have an ideal opportunity to embrace free market ideas that are working successfully in transitional nations and bring them home to Croatia! The messages conveyed at the International Leaders Summit ( through Dr. Alvin Rabushka (Hoover Institution), Dr. Daniel Mitchell (Heritage Foundation), Ivan Miklos (Deputy Prime Minister and Finance Minister of Slovakia) to Finance Minister Suker were very clear and profound -- it is time to implement free market ideas by introducing the flat tax as the first step!

Croatia's citizens and business leaders are openly frustrated with the status quo and seek economic freedom and prosperity. There is greater urgency for free market reforms in Croatia - now than ever before. As the leaders in Croatia are keenly aware, time is not on their side and bold decisions must be made to unleash free market forces that will lead to economic growth.

Natasha Srdoc-Samy, MBA
Joel Anand Samy
Co-founders of Adriatic Institute for Public Policy and
International Leaders Summit



I am personally trumpeting flat tax for the last 12 years to all the presidents and premiers in number of interviews and directly to them and to people who can make the difference. Simplify the tax code, lower the taxes so that everybody pays them with pleasure. I hope that that day is coming.


Nenad Bach

News Article - Reuters
Romania's young centrists win confidence vote
By Dina Kyriakidou, Reuters
BUCHAREST, Dec 28 (Reuters) - Romania's parliament voted in a centrist government on Tuesday packed with young, Western-educated academics vowing to speed up reforms needed to bring the Balkan country into the European Union.
Forged from four centrist parties, Romania's youngest post-communist cabinet faces two years of hard work to join the wealthy bloc along with Bulgaria in 2007 as planned. A joint session of both houses of parliament voted 265 for and 200 against Prime Minister Calin Tariceanu's government, hailed by many Romanians as a new beginning 15 years after the fall of Stalinist dictator Nicolae Ceausescu. Voters tired with poverty and corruption punished the outgoing ex-communist PSD for dragging its feet in pro-Western reforms. The young centrists must tackle a mountain of work in revamping rusty public administration and justice.
"Our main mission is EU integration," said Tariceanu, a successful businessman before turning to politics. "The government faces critical challenges, including endemic corruption, heavy taxation and poverty." Tariceanu's alliance of Liberals and Democrats campaigned on a tough anti-graft ticket and vowed immediate pro-business reforms such as drastic tax cuts to undermine the black economy and boost foreign investment. "It's the first time in 15 years that we have a prime minister who has made it in the real world and who has paid his taxes," said political commentator Cornel Nistorescu.
Tariceanu, 53, has made clear his first job will be to introduce as of Jan. 1, 2005, a 16 percent flat tax on income, now at 18-40 percent, and profit, now at 25 percent.
Although the Nov. 28 election failed to produce a clear winner, centrist President Traian Basescu's upset victory in the presidential race on Dec. 12 against the outgoing ex-communist PSD tipped the scales for the alliance. Tariceanu picked 36-year-old historian Razvan Ungureanu as his foreign minister, while economist and alliance spokesman Ionut Popescu, 40, will be finance minister in a cabinet largely welcomed by analysts as a clean break from the past.
The outgoing PSD was praised for its economic achievements but criticised for tolerating graft in its ranks and failing to protect human rights and press freedom.
The new government will be sworn in by Basescu on Wednesday.
(Additional reporting by Antonia Oprita and Mirela Roman)
12/28/04 15:56 ET


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