Protests against excessive taxation
Trade unions are protesting the high level of taxation
Leyla Cheamil, 14.05.2024, 14:00
The excessive tax on labor imposed by the Romanian Government prompted the National Trade Union Bloc and 29 affiliated federations to take to the streets of Bucharest on Monday to protest against taxation policies. Under the slogan “Respect for “work and those who work! Workers in Romania no longer want to be the guinea pigs of fiscal experiments”, representatives of trade union federations from all over the country organized a rally in front of the Government building, demanding a reduction in taxes, which they consider too high compared to salaries. Current labor market conditions are not encouraging, because high taxes translate as even more illegal work, trade unions say. According to the National Trade Union Bloc, Romania is the only country in the European Union and in the world where business contributions to the social security system have been shifted to employees since 2018. Thus, the contribution to health and the pension systems has doubled for employees, leaving employers with zero contribution. Therefore, Romania today has one of the highest tax burdens on labor costs in the EU: 42.8% compared to the European average of 38.6%, the National Bank of Romania states.
Over 87% of the fiscal burden is represented by contributions to the social security system. 82.6% of the budget allotted to the pension system and the health insurance system is covered by taxpayers, 97% of whom are active on the labor market. The fiscal burden placed on the shoulders of employees exceeds 50%, the maximum value stipulated by the Convention of the International Labor Organization and the European Social Security Code, protesters also pointed out. At the same time, Romania reported the third-lowest employment rate in the EU in 2023 after Italy and Greece, mainly due to low salaries and soaring taxation, Eurostat figures show. Only 69% of Romanians aged 20-64 are currently active on the labor market, meaning nearly a third of Romanians are out of work.
Prime Minister Marcel Ciolacu admitted that labor taxation in Romania is one of the highest in Europe, arguing, however, that the main problem is labor taxation for low incomes. “I cannot risk coming up with tax reductions for the minimum wage, only to realize that the number of minimum wage employees in the public sector has doubled”, the Romanian official said. Marcel Ciolacu added that the Government will try to come up with a system of deductions for people with low incomes, and part of these measures might be introduced starting this year. (VP)
