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Foreign investors ask Romanian authorities to clarify the transfer of social contributions status

Foreign investors ask Romanian authorities to clarify the transfer of social contributions status

In an open letter sent today to PM Viorica Dancila, FinMin Eugen Teodorovici and the presidents of the two Chambers of Parliament – Calin Popescu Tariceanu and Liviu Dragnea, the Foreign Investors Council (FIC) asks clarifications about transferring social contributions from employer to employee.

More exactly, FIC asks why the process of adopting by law the emergency ordinance regulating the transfer of social contributions from the employer to the employee is not completed yet.

“On October 31, 2017, the FIC sent a similar letter to the prime minister at that time, Mr. Mihai Tudose. We have been saying since then that we do not understand the economic arguments of this decision and have asked the Government to publicly and unequivocally convey the issue it wants to resolve through moving contributions and why it thinks this is a good solution. Last but not least, we have expressed the concern that this measure, in the absence of an impact study and without careful preparation of the implementation, will have unexpected effects.

However, business environment messages have been ignored. In the three months since its implementation, the reality has shown that the issues raised by employers were well founded and even new ones emerged. Now we are again in a situation that does not provide enough predictability and stability,” the document reads.

Emergency Ordinance 79/2017, which is in force since January 1, 2018, was discussed by the Senate and remained at the Chamber of Deputies level, being unclear when and whether it will adopt or modify it.

“We can all imagine new amendments that could overturn the whole system of labor relations and could generate problems and costs that employers can not assume. The lack of clarity concerning the purpose of social security transfer measure, as well as the lack of understanding of the impact for the different categories of employees have made the implementation not to be carried out uniformly by all employers in the private environment. Even in the public area, the application of this measure has had countless unexpected effects,” the foreign investors pointed out.

FIC argues that its representatives disagree how this transfer was regulated, but they want clear and predictable legislation to ensure medium-term stability, a guarantee given by final adoption in the form of a law approved by the Parliament and published in the Official Gazette. This will ensure employers continuity to apply the measures introduced by GEO 79/2017, and FIC members will comply with the legal provisions. In addition, they will be able to efficiently change their IT systems to address the bureaucratic problems generated by the new provisions in the long run and the associated costs.

“We believe that the Romanian private environment will appreciate Parliament’s completion of this legislative process so that the uncertainties will stop as soon as possible,” FIC concluded.

 

 

 

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