Deductible insurance premiums? Later

The Association of Business People in Romania (AOAR) says the insurance premiums the companies pay for their employees should be deductible, as suggested by the Insurance Supervision Commission (CSA). “The Association wants the salary tax and the global income tax rethought and used as levers to steer and boost the economy, and not just as mere mechanisms for collecting money and redistributing it at the governmental level,” the AOAR officials say. In their opinion, setting caps on insurance, as well as insurance periods will contribute to both motivating the employees and to the insurance market development. Finance minister Mihai Tanasescu told Ziarul Financiar that some of the life insurance expenses would be deductible in the end, yet the implications on the budget had to be considered. “We are discussing with the Insurance Supervision Commission about a change in legislation, so that the minimal maturity of the life insurance premiums would go up from just a few days, as until now, to at least three years to make sure insurance is insurance and not something else,” Tanasescu said. The high salary taxes in form of social security contributions (52%) last year drove many companies to start paying their employees through life insurance premiums maturing in a few days, which were not subject to salary taxes under the legislation in force at that time. ZF