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USR's Nasui: State should scrap minimum wage tax

epoch times romania
claudiu nasui

Chairman of the Save Romania Union (USR) Bucharest branch Claudiu Nasui welcomes the government's plans to cover between 35 and 41.5 percent of the gross wage for every employee who returns to work, but considers that the measure should be broadened in the form of a tax exemption for the minimum wage.

"The Orban Government has a good idea and must be supported to implement it. This Wednesday Mr. Orban said that the state will cover between 35 and 41.5 percent of the gross wage for each employee who returns to work. That's fine. Why 41.5 percent? Because that's exactly the share of the tax on labor in Romania: 35 percent are the contributions that make up the bulk of the tax burden on labor, so even if he doesn't say it directly, Mr. Orban refers to the taxation of labor. In other words, the state would at least temporarily remove labor taxation. Unfortunately, the measure would not apply to everyone," says Nasui, who sits on the Chamber of Deputies' Budget and Finance Committee.

In the lawmaker's view, "it is not clear to whom exactly" this measure would apply and how this can be done so that "it is neither discriminatory nor induces perverse incentives". In this regard, he warns that if the measure were applied only to employees from a certain date onwards, people could resign in order to be hired back and thus benefit from the tax facility. Nasui reminds that the USR has since long approached the taxation of low-paid work.

"Zero taxes on the minimum wage would help the entire economy and predominantly the Romanians who work on low wages. It would help the private sector cope with the crisis and adjust to post-COVID realities. And it would also give many Romanians working on low salaries in other countries a chance to stay and work in Romania. I am not asking that we be credited for this idea. It would be very good to have it implemented by whoever is at rule," he added.

On the other hand, Nasui recommends the government to offer the exemption only for the minimum wage and thus "broaden as much as possible the number of beneficiaries". This way the measure "would not be discriminatory or would be anyway less discriminatory," says Nasui.

"It is certain that the government is beginning to realize the failure of the IMM Invest program. That program through which the state takes your money and gives it back to you in the form of a loan. Moreover, the entrepreneurs have started to understand what this is all about. The government has been selling a story the entrepreneurs suddenly wake up from when they get in front of the banks and see that they have to mortgage everything they have and become personal guarantors, themselves and their spouses, with all their present and future assets. Not only does the government lend us our own money, but the state guarantee is visible only after we've already lost everything," the USR lawmaker explains.

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