“The most expensive investment in Romania is the investment in people, with employers operating on the Romanian market paying more and higher taxes per employee, and those who wish to invest locally are discouraged by these problems and complicated hiring procedures,” said Everard van Steenderen, Partner in Charge of Deloitte Balkans, one of the largest advisory and audit firms.
According to Gabriel Sincu, Senior Manager of Mazars advisory company, major social security payments also have a negative effect on the flat tax, which practically speaking is no longer functioning as a flat tax. He further believes that one of the solutions is the limitation of social security payments. “Many employers prefer identifying other methods of payment, while employees with high salaries prefer not to declare these,” added Sincu.
According to Ruxandra Jianu, Partner of the Biris&Goran law firm, even if salaries are quite high in Romania, over 500,000 minimum salaries (RON 500) and just over 30,000 salaries exceeding €2,000 are declared. “This fact indicates, beyond a doubt, that a significant share of employers prefer paying part of the salary without declaring this,” added Jianu.
Employers complain that they also waste a lot of time administering tax payments due to a defective system.
