Romania scraps tax on tips after public outcry

Romania announced on Friday that it was backing down on a decision to tax tips, following a public outcry over the proposal.

"We have decided to scrap this measure after constructive discussions with representatives from the hotel and restaurant industry," Finance Minister Eugen Teodorovici told a press conference.

Teodorovici said the measure would have been difficult to implement.

Under the legislation that went into force on May 8, waiters, taxi drivers and other employees in the service sector had to submit separate receipts for all tips earned.

But analysts had warned that the decree could be declared unconstitutional as it allowed tax inspectors to carry out raids to ensure waiters declared all of their tips.

Some experts even argued that the measure would actually end up costing the state.

The proposal was also criticised by the International Monetary Fund (IMF) and the European Union.

The decree was met with ridicule by many Romanians who took to the Internet to post receipts showing one-cent tips.