The current labour taxation system has significant structural vulnerabilities and major economic transformations are having a profound impact on the labour market, according to a study carried out by Deloitte for the Concordia Employers' Confederation.
The study called "Labour taxation in Romania" assesses the economic, demographic and administrative challenges influencing labour taxation and identifies concrete directions for modernising the system in a balanced and sustainable way, the quoted source mentioned.
According to Deloitte's data, Romania recorded a budget deficit of 9.3 percent of GDP in 2024, one of the highest in the EU, while the employment rate (ages 20-54) standing at 69.5 percent, well below the EU average of 75.8 percent.
"Approximately 20 percent of Romania's resident population is abroad, which reduces the taxpayer base," the study mentioned.
Concordia representatives point out that Romania has one of the highest effective tax burdens for employees in the region, at 41.5 percent, despite the flat tax rate.
"The level of digital skills remains very low: only 27.7 percent of Romanians have basic digital skills (EU average: 55 percent) - which also affects tax collection capacity. These structural realities, combined with the slow digitalisation of the tax administration and the large disparities between tax regimes applied to different types of income, create a system that is uncompetitive, difficult to manage and insufficiently adapted to economic transformations (green transition, population ageing, mass migration)," the document added.
In conclusion, the study's authors argue that Romania needs "a pragmatic reform, not abrupt tax changes and a coherent, stable and fair fiscal architecture - without increases in labour taxes, which would affect employment, competitiveness and the labour market, already vulnerable to current external shocks."
The Concordia Employers' Confederation represents 20 of the most important sectors of the Romanian economy and is a nationally representative social dialogue partner. Contributing 30 percent of GDP and employing over 450,000 people across 3,900 large and small companies with both Romanian and foreign capital, the Confederation is the only organisation in Romania that is a member of BusinessEurope, the International Organisation of Employers (IOE) and Business at OECD (BIAC).
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