Romania PM Says Govt Not In Favor Of Doubling Social Security Contributions For Copyright Income

Boc said the draft act increasing social security contributions for people who also gain copyright income was not discussed in the Government. He added, however, that this act also brings good measures, among which, the unification of the calculation base for social security contributions.

Boc also said that, despite some positive aspects, such as the unification of the calculation base for social security contributions, the draft act amending the Tax Code, which was sent to the Finance Ministry without having been discussed in the Government, also has some debatable aspects that cannot be accepted without informing Cabinet members first and having the Government's final standpoint on the matter.

Boc stressed he disagrees with doubling social security contributions for copyright income in 2011. He said this aspect was never discussed in the Government, therefore, he added, further public debates should take into account the fact that the Government never gave its consent as to doubling these contributions.

Unions and employers' associations reached an agreement with Labor Ministry officials, whereby, people who gain income from copyright, on the basis of Law 8/1996, namely those with creative work, should no longer pay social security contributions. The agreement, however, is pending approval by Labor Minister Ioan Botis.

Union leader Cezar Corici said unions and employers' associations decided Tuesday with Labor Ministry experts that only those people paid based on so-called copyright contracts, which actually translate into tax evasion, should pay social security contributions.

According to a draft Government Ordinance, Romanians who gain income from freelance activities will pay, starting with 2011, social security contributions of at least 25.36% and up to 35% of their income, nearly double from the current level of contributions. Under current law, they pay social security contributions in the amount of 16.5% of their income.

Furthermore, the pension insurance contribution is to increase to 24.43% from 10%, the health insurance contribution is to increase to 8.35% from 5%, while the contribution to the unemployment aid fund is to increase to 0.78% from 0.5%.

The draft also introduces a contribution of 0.85% for vacations and social health insurance indemnities and an insurance contribution of 0.15%-0.85% for labor accidents and professional diseases.

The draft ordinance amending Law 571/2003 on the Fiscal Code was put up for public debate last week. It should enter force on January 1, 2011, and be applicable to income earned in January 2011.

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