Fiscal and financial measures

New fiscal and financial measures are taking effect on October 1st in Romania.

Roxana Vasile, 01.10.2014, 13:17

The reduction of social security contributions paid by employers; the fact that a number of social categories are no longer obliged to return additional funds received as a result of an accounting error and the amendment of the budget — these are some of the measures coming into force on October 1st.

Employers have been looking forward to the 5% reduction in social security contributions for at least 5 years, but while it is welcomed by the business community, it has also generated anxiety. Some investors fear the measure may lead to further increases in taxes and fees or the introduction of new taxes next year. Also, according to the secretary general of the Association of Businesspeople in Romania, Cristian Parvan, there is no guarantee that this measure will generate more jobs:

“It will be different from one company to another, given that the business environment has faced increasing costs this year as a result of an increase in the price of energy, gas and fuel.”

The measure has also been criticised for political considerations. The coalition government, in particular the Social Democratic Party, which is its largest member, has been accused of trying to score some electoral points head of the presidential elections, as the Social Democrats’ leader and prime minister Victor Ponta is himself running for president.

Another measure coming into force on October 1st stipulates that around 30,000 Romanian pensioners and 12,000 women with children will no longer have to return money they had received because of an accounting error. Despite the fact that this will cost the state around 70 million lei, the government insists the state budget will not be affected. This is what the prime minister said after amending the state budget for the second time this year:

“For the first time in many years, budget returns in the first nine months of the year are higher than first estimated when the budget was drafted. The Romanian people have worked hard, honest companies have paid their taxes and fees and fiscal evasion has decreased, so that all estimated resources are now available, and we even have additional resources.”

Following the recent budget amendment, which has been criticised by the centre-right opposition, additional funds have been allocated to the ministries of labour and development and the local authorities.