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solidarity tax

Update2: FinMin announces 2pc solidarity tax during TV talk-show. Paper claims decision is unlawful

Finance Minister Ionut Misa announced Wednesday night, during a TV show at private broadcaster Antena3 TV that the companies will have to pay a new tax, 2% of the wage fund, as of 2018.

The minister also said that the transfer of social security and health security contributions from the employer to the employee will be enforced as of January 1, 2018, ziare.com informs.

“Another tax will be enforced, maybe we will name it solidarity tax, or something like that, we haven’t decided yet, of 2% of the wage fund to be paid by the employer,” Misa said.

The Finance Minister claims the decision on the 2% tax is coming from the European Commission. “It is a tax at the European Commission level, it’s not a new tax coming from the Government. There is a European directive regarding a certain percentage to be applied on the wage fund. This tax can in no way be eliminated, there is a European directive,” Misa said.

Minister Misa also said the income tax will be cut from 16% to 10% as of January 1, 2018. “It is about the tax income for all earnings,” the Finance Minister said. On the other hand, he mentioned that the tax exemption for wages below RON 2,000 will not be enforced in 2018.

On Thursday, Minister Misa has elaborated on the issue, saying that 90% of the solidarity contribution of the 2% will go to the state budget for ‘social expenditures’ on various destinations.

The rest of 10%, i.e. 0.2% will go also to the state budget on the purpose to cover the social security contributions of the employees working for companies becoming insolvent.

The Finance Minister said the draft bill is to be adopted and will be enforced as of January 1, 2018. He added that social security contributions will be of 35% from the employee and 2% from the employer. This means that, after transferring all the contributions from the employer to the employee, the Government has set another contribution from the employer, hotnews.ro informs.

Drawing the conclusion, capital.ro magazine says the state wants to take advantage of the money. The actual contribution to cover the insolvency risks will be 0.20%, down from 0.25%, hence less money for such situations. In fact, the state wants to take advantage of the rest 1.8%, the same source reads, which claims the decision is unlawful, as the current legal framework forbids this change. More precisely, according to Law 200/2006, chapter II, position 3, reads that “the financial resources built according to paragraph (1) are exclusively destined to finance the categories of wage claims provided by the present law, as well as for the financing of the management expenses of the Guarantee Fund.”

The publication claims the state hopes to collect RON 3.3 billion more next year by enforcing this tax.

The so-called ‘solidarity tax’ is enforced by several European countries, known as ‘corporate payroll tax’. Also, there is a European Directive on the guarantee of wage claims in the event of employers’ insolvency – Directive 80/987/EC/1980. Currently, the tax for the guarantee of wage claims is 0.25% and will be probably hiked to 2%, hotnews.ro informs.

In June 2017, Finance Minister Ionut Misa claimed the ‘solidarity tax’ will be paid by those earning at least 10 minimum wages (RON 14,500), but the initiative was abandoned later on.

About Valeriu Lazar