Lifting Facilities For Romanian Programmers Hinders IT Sector Development – Employers

"It is unacceptable for the government to promote measures effective immediately that entail major consequences on budgets of companies. It is unacceptable that organization affected by the measure were not consulted, in accordance with the law," Liviu Dan Dragan, head of the employers’ association in the software and services industry ANIS, told a news conference Tuesday.

Government Emergency Ordinance 93 of June 24, published in the country’s Official Gazette on June 30, includes stipulations affecting companies and employees in the IT&C sector, as health insurance contributions will be calculated with respect to salaries instead of the minimum wage.

"Salary costs will increase 5-6%, and as salaries account for 60-70% of companies’ costs, the measure will reduce profit margins for companies in the IT&C sector, which currently stand at 25-30%,” Dragan said.

Victor Martin, member of the ANIS board, said the measure will not increase health insurance fund contributions significantly.

"This ordinance doesn’t change much in the health insurance fund. There are some 20,000 programmers who benefited from this facility, so the contribution will be low,” Martin said.

ANIS said the ordinance may hinder the industry’s development and disturb the activity of companies in the sector.

"Beyond effects that can be measured in money, there are effects sending signals of instability to companies and foreign partners, which do more damage than contributions to the (health insurance) budget,” said Radu Georgescu, general manager of GeCAD, member of ANIS.

Georgescu added the adoption of this measure, effective immediately, is unacceptable, especially since employers were not consulted.

"Had we been informed beforehand that there would be a new tax, companies would have had time to prepare for its effects. We would like to draw attention that we want to be consulted in the event of any other taxes,” Georgescu said.

The IT industry employers’ association said the stability of the legal framework, and the fiscal framework in particular, are criteria that investors consider when they decide to enter a market.