Enforcing tax package might generate risk for employer-employee power balance and drop of IT wages (Socol)

Enforcing the tax package might generate a risk with regard to the employer-employee power balance and wages in IT might drop, Cristian Socol, associate professor at the Bucharest University of Economic Studies (ASE) maintains. 

"The tax revolution is an exaggerated expression. A tax package is being proposed that is trying to consolidate the wage led growth strategy, with pluses related to the impact of employees' purchasing power (more so for those with lower wages, doctors and teachers), pensioners (those with wages above 2,000 lei) and a fiscal loosening/encouragement of those who engage in independent activities and those who receive income from interest rates, rents, leases, investments," Socol told AGERPRES. 

Moreover, according to him, after the changing of the basic principle that establishes the pension contribution through the new pension Law, the contribution and implicitly the pension will increase by 20 pct. 

"Small and medium sized businesses are being stimulated by trying to lift as many Romanians as possible to the middle class. As for weak points, I would mention the incomplete communication of the measures, a certain risk with regard to the employer-employee power balance (collective labour contracts should be reintroduced here) and the drop of IT salaries (here, a new scheme/the already existing scheme of state aid in investment and job creation so that the state compensate for the losses should be grounded/updated). On the side of the local public administrations, compensatory solutions should be presented so that investments are not affected," the associate professor at ASE further explained. 

An Emergency Ordinance draft for the modification of the Tax Code, recently published by the Finance Ministry, provides for the transfer of social contributions from employer to employee starting with 1 January, 2018. The level of the contributions paid for the gross salary is due to drop by 2 percentage points, from 39.25 pct to 37.25 pct.