Marcel Ciolacu: "The clear intention of the Government is for the minimum wage to increase to 3700 lei"

George Marinescu
English Section / 15 mai

Marcel Ciolacu: "The clear intention of the Government is for the minimum wage to increase to 3700 lei"

Versiunea în limba română

The government is decided to increase the gross minimum wage in the economy to 3700 lei, but before that it will have a discussion with the social partners - employers and unions, said Prime Minister Marcel Ciolacu at the end of the Executive meeting that took place yesterday in Braşov.

Marcel Ciolacu stated: "At this moment, the Government's clear intention is to increase the minimum wage to 3700 lei. From my point of view, I think that the priority is at this moment at the World Bank, to finish the study (ed. - regarding the law of single pay in the budget system, law 153/2017) which is to be submitted to the European Commission. As you well know, we have in payment request number 4 (ed. - from PNRR) passed the reform and respectively a new salary law. Until then, really, we have discussions in the margins of Law 153, the law we have at the moment".

Marcel Ciolacu's statement comes after, two days ago, 29 trade union federations affiliated to the Blocul Naţional Sindical confederation protested in the Capital requesting the reduction of taxes and fees applied to salary income.

Regarding the current labor taxation system, the head of the Government also said yesterday: "It was a wrong approach, because the inability to collect, the inability to finally have digitalization at ANAF led to a decision being made, from my point of view totally wrong view - that of increasing taxation where it is collected best and where the Romanian state collects it best, it also having, if you do not pay the withholding tax at source, also being criminal. And then it came to be that work was taxed the most. Totally incorrect, because taxation is uniform, regardless of income. That is why I am firmly convinced that in the next period and this week, I will start discussions with the social partners to reset things, but I do not want to do this as others have done, i.e. let's make some decisions on the corner of the table, which we will later pay for through rising inflation. Categorically, labor taxation in Romania, especially for those with low incomes, we must - and here we include almost a third of Romanians - we must intervene. It comes through an immediate measure, having a perspective on the new salary law, but also through a measure that also develops other services and Romania's economy becomes more dynamic. In other words, Romania needs a plan. (...) I, emotionally, to make decisions at this moment and destroy the entire macroeconomic balance, I will not do this. Instead, I will make decisions because what is happening now is a social injustice."

Also yesterday, USR requested the Prime Minister Marcel Ciolacu to reduce taxation on the equivalent of the minimum wage, according to a press release sent to the Editor. USR leaders show that almost half of the gross earnings of employees is taken by the state, with our country having the highest taxation of low wages and the highest degree of in-work poverty in the European Union.

Deputy Claudiu Năsui (USR), member of the Committee for Budget, Finance and Banks, said: "For years we have been saying that Romania has a problem with too high labor taxation. We also offered a solution: reducing taxes by exempting the minimum wage from taxation. In this way we ensure a decent minimum wage, stimulate work and reduce the economic migration of Romanians to other countries. In the current system, the increase in the minimum wage is done from the pen at the gross level, and the state collects almost 50% of this increase, putting pressure on the business environment. Instead, reducing taxation would leave people directly with more money in their pockets, without any additional pressure on employers, and the state would encourage increased compliance and reduced evasion."

His colleague, Cristina Prună, vice-president of the Commission for Industries and Services in the Chamber of Deputies said: "It took Prime Minister Marcel Ciolacu several years to realize what USR keeps saying, namely that we have the highest taxation of low wages in the European Union. Let's hope it doesn't take another few years for them to also understand the solution I proposed: reducing taxation by exempting taxes on the minimum wage. It is a measure that would benefit all Romanians, given that the underlying problem is that of high labor taxation in general. Let's even gradually introduce this measure, in parallel with the reduction of abnormal state expenses".

The USR requests that the process of relaxing the taxation of the equivalent of the minimum wage be started from July 1 of this year, instead of the new increase in the gross level desired by the Government, which otherwise risks putting new Romanian businesses on hold and leading to increasing unemployment, with negative economic and social effects.