Perspective on the budgetary fiscal package

//Perspective on the budgetary fiscal package



October 2, 2023


The new regulations will negatively impact the net income of employees in the IT industry, due to the introduction of the new 10% tax rate for incomes exceeding 10,000 RON gross.

It is worth mentioning that, in recent years, this sector has experienced a significant expansion by retaining a highly skilled workforce in Romania, precisely as a result of the government’s beneficial intervention through tax exemptions for this category of employees –  thus significantly contributing to the increase in budget revenues on other channels. The IT services provided by the business services sector have experienced significant development recently, facilitating the industry’s evolution from transactional to high-value-added services.

Therefore, it is clear that these highly valuable resources for the Romanian economy will no longer be encouraged to remain in Romania, that we are losing a competitive advantage, and that the migration of these resources (along with the projects they coordinate) to more attractive destinations will be significantly increased, potentially resulting in a cascading negative effect on budgetary revenues.

Consequently, ABSL considers that operating in conditions of high risk and unpredictability will make it more and more difficult to attract new projects to the Romanian market and promote Romania as an attractive and competitive destination for high-value-added projects.

Introduction of CASS for meal vouchers

Most companies in the industry provide benefits to employees, with new benefits such as those in health and well-being, psychological counselling, gym memberships, and more being introduced after the pandemic.

However, classic benefits such as meal vouchers continue to remain a preferred option for many employers (according to the latest study conducted by ABSL in 2022, 94% of companies in the industry use this option), and therefore, taxing them will likely lead companies in the industry to find new alternatives for employee benefits.

Tax Increases

Companies of various sizes, all affected by these increases, will feel additional pressure as a result of the tax increases. Consequently, they may need to adapt certain expenses such as those related to HR (recruitment of new employees, training programs), as well as costs associated with digitization and innovation, to navigate the current context.

In light of the points raised above, we propose a reassessment of these measures and encourage their discussion with representatives from the business sector, with ABSL assuring the Government of its commitment to allocate resources for working groups to discuss these matters and provide concrete proposals as viable alternatives to foster a favourable legislative framework for the development of our industry and the Romanian economy.

The business services industry contributes significantly to Romania’s economic growth, employing over 180,000 individuals and representing over 5% of Romania’s GDP. This industry experiences sustained development, with annual growth projections of 10%-15% for the upcoming years, in the context of legislative and political steadiness.