Last year, Romanian employees worked 174 days only to be able to pay taxes imposed by the state. This tax burden ranks the country on the 8th place in the top of the labor force tax in the 28 EU Member States, according to ’The Tax Burden of Typical Workers in the EU 28’ study signed by James Rogers and Cecile Philippe from Molinari Economic Institute in Brussels.
The purpose of this study is to compare the tax and social security burdens of individual employees earning typical salaries in each of the 28 member states of the European Union and, in doing so, to determine a “tax freedom day” – measuring how much of each year’s work is devoted to paying taxes – for workers in each country.
With a real tax rate of 47.62 percent of wage income, Romania is overtaken only by 7 European countries.
France retains its position as the EU member state that taxes labour at the highest rate. France ranks first with a real labor force tax rate of 57.53 percent, followed by Belgium with 56.9 percent, and Austria with 54.7 percent. Among Europeans who pay more than 50 percent of state income taxes (income tax and social contributions) are Hungarians (54.1 percent), Germans (52.36 percent), Greeks (51.48 percent) and Italians (50.13 percent).
The Tax Freedom Day in Romania was on June 20, three days earlier than in 2015, when the Romanians worked until June 23 to pay all the taxes to the state. In 2014 and 2013, the Tax Freedom Day was in July, and in 2012, the Tax Freedom Day was on June 23.
Higher pension and health care expenditures are among the primary effects of the ageing of Europe’s population, and there are fewer workers to pay for these costs; despite a decrease in the unemployment rate (down from 8.9 percent to 8.2 percent in 2016), only 45.4 percent of EU citizens were in the labour force in 2016 , 0.3 percent lower than when the first edition of this study was released in 2010. Once again, budget cuts and economic growth remain workers’ best hopes against tax increases in the near term.