As per the Tax Code draft, Romania will scrap health contribution deductions from the income tax starting 2016.
The draft provides introducing a maximum ceiling of five average gross wages for the monthly calculation basis of the social security contributions and health insurance contributions starting January 1, 2016, scrapping health contribution deductions from the income tax starting January 1, 2016 and making the payment of social security and health insurance contributions mandatory for all income earners.
According to the draft, the social security tax rate will be lowered from 10.5% to 7.5%, for employees, and from 15.8% to 13.5%, for employers, starting January 2017.
The proposed measures will lower revenue collections to the state budget by RON5.2 billion in 2016, but bring additional revenue collections of RON2.7 billion from the value added tax, social security contributions and salary tax, due to an anticipated increase in the number of jobs. The net budget impact is seen at RON2.5 billion.