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Senate rejects bill providing for 90 percent tax on special pensions

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The Senate plenary rejected on Wednesday the bill initiated by the lawmakers of the Save Romania Union (USR), providing for a 90 percent tax on special pensions.

"The USR has been trying to fully abolish special pensions since 2016, but our efforts have been to no avail because of the hypocrisy of the parliamentary parties. These parties, and the Social Democratic Party (PSD) in particular, said we should tax these special pensions, but PSD actually intends to reject the bill, just as it did in the Senate select committees (...), because for PSD politics means winning votes by doing favors to certain social and professional categories," USR Senator Florina Presada declared in the Senate plenary.

He added that as the Romanians are forced "to endure this injustice called special pensions," the USR parliamentary group opposes the bill rejection report.

"How long should the Romanians endure this injustice called special pensions? How do you explain to the Romanians the difference between the minimum pension of 704 lei and the highest special pension of 70,000 lei? Why don't you want us to bring billions of lei to the budget, to direct them into health investments, particularly during this time of crisis? You should know that you cannot fool the Romanian citizens, they will find out who votes against their interests. USR opposes the report rejecting the bill for the 90 percent taxation of special pensions," said Presada.

According to the explanatory memorandum, "although the public pension system calls itself 'unitary', it is far from being so. Certain categories benefit from what are called 'special pensions', a category of pensions that are not legally defined, but includes all the non-contributory pensions granted under special laws and, most importantly, paid from the state budget, ie from taxpayers' money."

The initiator also argues that the unitary public pension system "is not, in fact, unitary at all, as there are categories of beneficiaries outside the system".

"What fundamentally distinguishes public pensions from special pensions are the following: the applicability of the contributory principle in the case of public pensions, but not also for special pensions; the stage of regulation on special laws, which derogates from the General Law of the unitary system by instating more favorable terms for determining and calculating special pensions. This has led to unfair effects and discrepancies between public and special pensions," the explanatory memorandum reads.

The legislative proposal for establishing a set of measures regarding special pensions and restoring the economic balance by complementing Law No. 227/2015 on the Tax Code will be sent for debate to the Chamber of Deputies, which is the decision-making body in this matter.

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