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Government prepares to cut labour taxes

The Romanian government will come with a set of tax incentives to reduce taxation of labour until mid this year, because Romanian employers need to make a profit in order to create new jobs, said Labour Minister Ioan Nelu Botiș, 43, at a meeting in Bistrița with businesspeople in the county.

Mediafax · 13 martie 2011 · 1 min de citit

The Romanian government will come with a set of tax incentives to reduce taxation of labour until mid this year, because Romanian employers need to make a profit in order to create new jobs, said Labour Minister Ioan Nelu Botiș, 43, at a meeting in Bistrița with businesspeople in the county.

“We will seek to reduce contributions, so the labour tax will be lower. Currently, taxation of labour amounts to around 45%. Unfortunately, it is quite high compared with other countries in the European area and I think we should cut it by a few percentage points, but I don’t know how many. Based on analyses, it is analysts who will tell us up to where to go,” Botiș said.

Another sector where Romania is experiencing anomalies is the allocation of amounts for social services (family allowance, child rearing benefits, disability benefits), where there are 202 types of such allocations, so, according to the Labour Minister, out of the pockets of those who are working money goes into the pockets of those who are not working, via 202 channels. In fact, over 10 million Romanians benefit from various forms of social security, which costs the state around 8.8 billion lei (2 billion euros) a year – a figure given by former Labour Minister Mihai Șeitan.

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