SOURCES: Government considers eliminating tax breaks for construction and agricultural workers: they too will pay health contributions

The Ciolacu government is considering eliminating tax breaks for employees in construction and agriculture in two stages, on 1 September 2023 and 1 January 2024, government sources said. It is about the introduction of the health contribution of 10% of gross income, which they do not pay at present, according to the sources cited.

As for construction workers, the tax breaks are valid until 2028 and consist of exemption from income tax, exemption from paying health contributions and reduced pension contributions. At the same time, a minimum gross wage of 4,000 lei must be ensured in this sector.

Employers in agriculture and the food industry also benefit from a set of tax breaks: reduced payroll taxes paid to the state, exemption from health contributions, and a differentiated minimum wage of 3,000 lei gross.

IT employees will not be affected by this plan to eliminate tax breaks, as they already pay health contributions. The only tax relief for IT workers is now the income tax exemption (10% of gross salary).

It should be recalled that the NRRP, the program undertaken by the government at the European Commission, provides for the elimination of these facilities by the Romanian authorities by 2026.

Finance Minister Marcel Bolos said earlier this week that he would propose to the coalition to abolish some tax breaks from 1 September to cover new spending. Boloș also said that there can be no question of one category of tax relief beneficiaries being treated separately from another.

„There are two categories of tax incentives, some that can take effect from September 1, here we are talking about those related to consumption and income. We have divided them precisely in this way tax facilities and their impact – those with effect from September 1 and then the second set – with effect from January 1. This is a very important fiscal consolidation process for Romania”, Marcel Bolos told Digi24, without detailing which tax incentives he was referring to.