Budgetary and fiscal policy for 2024 approved
Parliament approved in second reading the amendment of several legislative acts that are part of the budgetary and fiscal policy for 2024. The draft contains fiscal instruments for attracting and retaining skilled labour; revision of the mechanisms for calculating and paying taxes and duties with a view to simplifying and clarifying the legislative framework, prerequisites for discouraging the "envelope wage" phenomenon, measures to improve tax administration, etc.
According to a press release issued by the legislature, the draft also aims to continue the process of harmonising national legislation with European Union legislation, with priority given to VAT and excise duties.
Among the concrete measures are the extension of the spectrum of tax incentives and the revision of the categories of expenses incurred by employers in favour of employees, allowed for deduction for tax purposes.
The draft proposes to extend the categories of deductions for individuals when determining income tax liabilities with expenses related to voluntary health insurance premiums or for contracting medical services, expenses related to the premium under the life insurance contract. Individuals will also be able to deduct interest payments on mortgage loans, up to the amount of an average salary in the economy.
The document also provides for the standardisation of personal income tax rates for investment and financial income, which are set at 6%. The measure is intended to encourage investment of savings accumulated by individuals by applying a single regime to all the income mentioned.
At the same time, the tax on excise products, including tobacco, cider and some petroleum products, is expected to increase by 7% annually over the next three years, except for certain categories of products such as liquefied gas, heating oil, beer and alcohol.
In order to comply with the commitments to harmonise tax and customs legislation, the tax regime for passenger cars is amended by taxing them with VAT on general principles from 1 January 2026, with a gradual decrease in the excise duty rate.
