Only 69% of Romanians aged 20 to 64 are currently employed, leading to concerns about the country’s high taxation rates on wages. A national trade union protest was held outside the parliament building in Romania demanding lower taxes on wages, with around 3,000 union members participating. Protesters argue that high taxation on work is leading to stagnant wages and forcing many Romanians to seek better paying opportunities abroad, with an estimated five million citizens leaving the country in search of higher salaries. They claim that over 42% of their gross income goes to the state, significantly higher than the EU average of 38%, impacting their ability to improve their standard of living.
The president of the National Trade Union Bloc in Romania highlighted the struggles faced by citizens due to high taxation rates, stating that almost two million individuals did not pay any taxes on their incomes or contribute to social security and health programs in the previous year. In 2023, Romania had an employed population of 7.7 million people, but only 5.6 million individuals paid social security contributions, leaving a significant portion of the workforce without proper support. The base income tax rate in Romania is set at 10%, however, mandatory contributions to various social programs and the state budget result in a much higher percentage of gross income being taken by the state, exacerbating the financial burden on workers.
The high taxation rates and low wages in Romania have led to the country having the third lowest employment rate in the EU in 2023, following behind Italy and Greece according to Eurostat data. Many Romanians feel that the political elite prioritize capital over the well-being of the working population, further fueling frustrations among union members and protesters. Lowering taxes on work is seen as a solution to help improve the standard of living for citizens and reduce the need for emigration in search of better paying jobs. The sentiment among protesters is that a decrease in taxes would result in higher wages, enabling individuals to support themselves and their families without having to leave their homeland.
The protest outside the parliament building in Romania brought attention to the challenges faced by workers in the country, with demands for significant changes to the current taxation system to alleviate the financial burden on employees. The National Trade Union Bloc advocates for fair tax policies that do not disproportionately impact workers and hinder economic growth. As the country grapples with high emigration rates and a shrinking workforce, addressing taxation on wages is seen as a crucial step in improving the overall economic situation and retaining skilled professionals within Romania.
The disparity between wages and taxes in Romania has strained the workforce and driven many citizens to seek employment opportunities abroad. While the base income tax rate in the country is relatively low at 10%, mandatory contributions to social programs and the state budget result in a much higher percentage of gross income being taken by the government. By addressing these issues and implementing fair tax policies, Romania has the potential to improve its employment rate, retain skilled workers, and boost economic growth. It is essential for policymakers to prioritize the well-being of the working population and create a supportive environment that promotes job creation and financial stability for all citizens.
