Romania’s Government hasn’t given up the idea of fully transferring social contributions to employees. In order to keep the employee's net income without increasing the total cost for the employer, the total amount of social contributions will be reduced from 39.25% to 35% of the gross wage, according to a draft project to amend the Fiscal Code.

Moreover, the income tax will be reduced from 16% to 10%, but the social contributions paid by self-employed people (PFA) will double, according to the same document, reports local Profit.ro.

These provisions don’t represent a lower tax burden on taxpayers in reality. They are just amendments allowing the Government to fully transfer the social contributions to employees without affecting their net income.

In the case of self-employed people, social contributions will double. They currently amount to 5.2% for health and 10.5% for pensions, but will increase to 35%, according to the current draft project.

Overall, the state will keep only two types of social contributions, out of a total number of six social contributions until now. They will include the health and pension contributions. The contributions for unemployment, work accidents or holidays will disappear.

editor@romania-insider.com