The high social contributions contrast the low collection rate to the state budget, the international bank said in a report on the pension systems in Europe and central Asia.
According to the report, employer and employee contributions in Romania amount to 55% of the gross monthly salary. The average statutory payroll contribution rate in the CEE region varies from 3% in Armenia to 45% and 49% in the Czech Republic and Slovenia, respectively.
On the other hand, Romania’s collection rate from social security contributions is of 9% of the gross domestic product, compared with 12% of GDP in Hungary and Slovenia and 15% of GDP in the Czech Republic.
“Countries like Romania and Ukraine seem to be trapped in high rate–low collection equilibria and may therefore have considerable room for additional taxpayers and more transactions coming into the system,” the World Bank said.