Romanian PM to carry out final negotiations with IMF, labor taxation cut still uncertain

Romania’s Prime Minister Victor Ponta said he will have a final meeting with the joint delegation of the International Monetary Fund (IMF), European Commission (CE) and World Bank today (June 12) and will hold a press conference at 18:30 to present the results. “I did not sleep very well last night. After this conference I will have a final meeting with our international partners,” he said in the beginning of his keynote speech at the Euromoney Regional Finance and Investment Conference for SouthEast Europe in Bucharest. In his speech he talked about the economic progress Romania had in 2013 and reaffirmed that the main goals of the Government are to secure Romania’s energy independence and to stimulate the creation of new jobs. “Figures look well, but one of the battles which has not been won is how to create new jobs on the white market,” Ponta said. He added that investors are satisfied with the 16 percent flat tax on corporate profits but complain about the high labor taxation. “The general political goal is how we reduce labor taxation to encourage companies to create new jobs and to convince the black market of jobs to become legal and declare everything. We will try to find the reasonable solution to have a lower taxation,” he said. But he didn’t refer to the specific measures which will be taken, although one of the goals set by the Government for its negotiations with the IMF was to get approval to reduce the social security tax - CAS by 5 percent starting July 1. Romanian companies pay for their employees a CAS of 20.8 percent of the gross salary. This led to rumor that the IMF would not accept the drop in the CAS, which would trigger lower budget revenues at first, and that this measure could be in fact postponed. Andrei Chirileasa, andrei@romania-insider.com