The employees' net income will increase and the employer will not pay more money into the national budget as a result of the income tax decreasing from 16 percent to 10 percent, social security contributions decreasing from 39.25 percent to 37.25 percent and the switch in payment of the mandatory social security contributions from employers to employees, Finance Minister Ionut Misa said Wednesday.
"The much discussed and debated ordinance that contains amendments to the Tax Code included in the governance program, meaning long time known changes approved by Parliament, brings important benefits to citizens and companies that operate in Romania today," Misa said at the start of a government meeting, at the request of Prime Minister Mihai Tudose.
Misa pointed out that the first fiscal measure was to reduce the income tax from "16 percent to 10 percent for employees, pensioners, authorised individual traders, on income drawn from copyright and by individual businesses, on rents, on interest, annuities, prizes, agricultural activities, forestry and fish farming, as well as on income from other sources and investment, except for dividend income, where the tax remains at 5 percent."
"At the same time, social security contributions are reduced from 39.25 percent to 37.25 percent, so there is a two-percent cut in social contributions. In correlation with these two measures, there is a third measure aimed at transferring to employees the payment of mandatory social security contributions incumbent on employers in the case of wage and related income. I would like to mention that the effect of all these three cumulated measures will be an increase in the employees' net income without the employers paying more money into the national budget," Misa explained.
AGERPRES .
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