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Romanian Ctrl Bker Says Social Security Cuts Good For Economy

Lowering the general social security contributions would help stimulate business competition in Romania, a central bank official said Tuesday, adding that the measure shouldn’t take too much of a toll on the government budget.
Romanian Ctrl Bker Says Social Security Cuts Good For Economy
Radu Bostan
05 apr. 2011, 14:05, English

„It appears corporate taxation is very high in Romania (…). Social security payments must be lowered as soon as the necessary criteria are met,” said Lucian Croitoru, adviser to the central bank governor.

Speaking at an economic seminar organized by Ziarul Financiar, Croitoru said the decision to cut social security contribution is financially sustainable. However, the Finance Ministry has the last word on the issue, he added.

„To summarize: if you want to stimulate competitiveness, then you should reduce the social contributions,” Croitoru said.

Romanian government is considering cutting the general social security contributions to 41% from 44% presently by reducing the taxes paid by employers.

The measure would be part of a larger package meant to jumpstart the economy, which contemplates lowering the flat tax rate up to 12% from 16% currently and introducing dedicated credit cards for small- and medium-sized enterprises.