Reforming the Property Tax System in Romania: A Necessity
Reforming the Property Tax System in Romania: A Necessity

Summary/Abstract: Purpose and need for study: Given the enormous need for financial resources of local communities, imposed by the growing and diverse needs of citizens, our study aims at a holistic analysis of the need to reform the property tax system in Romania, as the main source of tax revenue available to the local public administration. If the strengthening of democracy means the strengthening of local autonomy, then it means that we must create a system of financing local authorities that is efficient, fair and directed to the real needs and capabilities of the citizen. Methodology: In developing the study we used a methodology of multidimensional comparative analysis, both domestic tax performance and the alignment of legal provisions and objectives assumed by government policies, with the real possibilities of reforming the property tax system. Every time a tax reform is proposed, there must be certain elements or steps to follow, which are recommended for its success and implementation. A fiscal reform consists, by definition, in modifying the structure of one or more taxes or the tax system, in order to improve its functioning to achieve the assumed objectives. Findings: It is important to make a very good diagnosis of the current property tax system including, in particular, the various issues related to the tax base, fiscal facilities, digitization and the need for energy efficiency and the elimination of pollutant emissions. A tax reform must contain a description of the proposed ideal system, i.e. what is intended to be done and the direction of the changes that are intended to be adopted. Any tax reform that a country intends to undertake should, today more than ever, consider simplifying tax legislation and procedures, incorporating also issues related to digitization and many other issues and phenomena resulting from studies carried out by experts in the field, both in the public and in the private sector. Practical Implications: Carrying out a tax reform involves analysing multiple variables, which vary depending on the national or local specific. Our study aims to be a basis of analysis and a potential foundation for the reconstruction of the property tax system in Romania.

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