Ponta: We will obviously have a labor tax cut in October

Social contribution taxes will “obviously” drop on October 1, according to prime minister Victor Ponta. The official adds that the measure benefits from the support of Romania’s business environment and can contribute to jobs becoming part of the fiscal system.

“I am absolutely convinced that the Government is doing all that it can to ensure the stability and predictability the business environment needs to continue investments, development and job creation. Obviously, on October 1 we will also see a cutback in social contributions”, according to Victor Ponta.

Afterwards, in a Government meeting, the prime-minister let the ministers know that president Traian Basescu will send back the draft to the Parliament and deputies will need to vote on it again in September.

On Tuesday, Ponta claimed that the labor tax will be reduced in January if president Traian Basescu opts to attack the draft through the Constitutional Court.

The measure will generate a loss of RON 5 billion in revenue in a year when the state is expected to reduce the deficit to 1.4 percent of GDP from 2.2 percent.

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Asked by journalists if he plans to do that, president Traian Basescu said it “remains to be seen” and will have a discussion with the business environment. The president claimed he is waiting on the Finance minister to provide documentation regarding extra sources of income.