Government to regulate public sector spending cuts in 2025

Among the planned measures are: maintaining the reference point, an essential element in the calculation of pensions, at the level of 81 lei and the value of the social reference indicator at the level in payment in November 2024, reducing the subsidy allocated to political parties by 25% compared to the level granted this year or not updating the service pensions with the inflation rate.

At the same time, the draft proposes to increase the tax rate from 8% to 10% for dividends distributed as of January 1, 2025, also, the ceiling of income realized by a Romanian legal entity is reduced from 500.000 to 250.000 euros, including during the tax year.

Trade unions criticize the announced measures and warn that protests will follow.

Translated by: Radu Matei