Romanian politicians beware of raising taxes and drinking out of the Danube

Witches brewed quite a spell for Romanian politicians last week, making potions and throwing poisonous Mandrake plants into the Danube River. This was to protest new tax laws, which took effect January 1st.

For the first time witches will be required to pay 16 per cent income tax and contribute to a pension.  Most witches are self-employed and this new law is aimed at requiring self-employed workers to contribute to the public finances in a country in deep financial turmoil. Queen Witch, Bratara Buzea, is very angry at the new law and expressed her dismay at the government’s audacity in stopping her evading tax "We do harm to those who harm us, they want to take the country out of this crisis using us? They should get us out of the crisis because they brought us into it.”

Why is this important?

Well it is pretty simple actually – British taxpayers should be quite happy that the Romanian government are actively moving to combat fraud and corruption.

British taxpayers have already paid massive amounts for new countries like Romania and Bulgaria to be in the EU. Every UK household has paid £257 a year for their membership. In total the EU budget has increased from £4.9bn in 2009-2010 to £6.4bn in 2010-2011, and part of that rise is funds to support countries like Bulgaria and Romania.

Whilst Britain struggles to come out of a recession and British taxpayers are struggling with increased VAT, and a higher cost of living, the Romanian government should be doing what it can to sort out its finances. But what this story also shows is that the tax system in Romania clearly has some bizarre reliefs and exemptions. The UK is not immune to this – the Office of Tax Simplification recently published a long list of 1,042 tax reliefs. As well as taxing too much, the tax system is far too complicated and needs drastic simplification.

Lets hope that these Witches don’t decide to bring their ideas to London, if so then George Osborne should beware of drinking out of Thames.

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