Fiscal Council proposed that the tax reform to be implemented in two phases.
In the first phase, which will be effective immediately upon the constitution of the Government, proposing:
- Increase both the tax rate of VAT - from 18% to 22% and from 8% to 10%
- Switch fifths (non existential) products with lower tax rates on higher tax rate
- Increase in excise duties, primarily on tobacco products and alcoholic beverages.
In the second phase, from 01 January 2013, Fiscal Council suggested:
- reduce the fiscal burden on labour, by reducing the employer contribution from 17.9% to 10% of gross earnings, which would reduce the fiscal burden of work from 64% to 54% for employees with an average salary and 45% for employees with minimum wage,
- abolition of the restriction of a number of quasi-fiscal levies,
- the abolition of exemptions and deductions in the tax on corporate profit and the improvement of legislation and collection of property tax.