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Writer's picturemeowdini
May 151 min read

Romanian Government Mulls Tax Reforms, Potential Impact on 1.5 Million Employees

The Romanian governing coalition is exploring various options to reduce labor taxation, with three main proposals currently under consideration. However, these potential reforms could have a significant impact on the take-home pay of approximately 1.5 million low-wage earners.


Proposed Tax Reforms

  1. Progressive Taxation: Introducing a progressive tax system would entail higher tax rates for individuals with higher incomes.

  2. Global Income Tax: Implementing a global income tax, also known as a household tax, would tax the combined income of all household members.

  3. Targeted Tax Deductions: Providing targeted tax deductions for specific social categories could offer relief to certain groups of taxpayers.


Potential Impact on Low-Wage Earners

While the proposed tax reforms aim to reduce the overall tax burden, they could negatively impact low-wage earners,particularly those receiving the minimum wage. The current minimum wage exemption from taxation for the first 200 lei could be eliminated, potentially leading to a 100 lei decrease in monthly take-home pay for these individuals.


Concerns and Considerations

The potential impact on low-wage earners has raised concerns among some stakeholders, who emphasize the need to protect the most vulnerable members of society. Careful evaluation and consideration of these concerns will be crucial as the government deliberates on the appropriate tax reform measures.


Balancing Tax Reduction with Social Protection

The Romanian government faces the challenge of balancing the desire to reduce labor taxation with the need to safeguard the well-being of low-wage earners. A comprehensive approach that considers both economic objectives and social implications will be essential in formulating effective tax reforms.



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