Rumania to Drop Emigration Tax
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Rumania to Drop Emigration Tax

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Rumania intends to drop its tax on emigrants, Foreign Minister Stefan Andrei of Rumania told Vice President George Bush and Secretary of State George Shultz and other U.S. officials during two days of talks this week in Washington. The move is an effort on the part of Rumania to avoid losing its most-favored-nation status with the U.S.

Rumania is expected to issue a formal statement to the U.S. goverment affirming that the tax on emigrants will not be applied. Rumania imposed the tax on emigrants last November despite warnings by the Reagan Administration at the time that such a step would bring about the revocation of the MFN status. Rumania began imposing the tax, the cost of free education emigrants received beyond the compulsary 10 years, on those seeking to leave for Israel, the U.S. and West Germany.

On March 4, President Reagan announced that Rumania would lose its trade status by June 30 unless it changed its policy by then. Under the 1974 Trade Act, any Communist country that imposes an “education tax” automatically loses its MFN status.

That provision, part of the Jackson-Vanik amendment to the Act, was prompted by the Soviet Union, which had imposed such a tax but later rescinded it. Hungary and Rumania are the only two Warsaw Pact countries with MFN status. Poland had that status but it was suspended last year after its government cracked down on the Solidarity trade union.

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