Romania's buoyant IT sector, which has balanced on its own a large part of the country's external deficit and has supported the country's economic growth over the past years, is not competitive without the tax allowances enjoyed by its employees, the industry's association ANIS argues.

Given this, it is unclear who supports whom, among the IT industry and all the other sectors that mostly pay regular taxes.

"The elimination of tax incentives for employees in the IT&C industry, a measure discussed in the Government, would turn Romania into an uncompetitive country in the region and would have a negative economic impact," said Mihai Matei, president of the Software and Services Industry Employers' Association (ANIS), quoted by Ziarul Financiar.

"We have Poland, Ukraine, and the Czech Republic as competitors, and we become uncompetitive in the region," said Matei, arguing that those countries "have a set of facilities extremely favourable to the IT companies."

Currently, employees who perform activities in the field of information technology in Romania do not pay an income tax of 10% but pay pension contributions (25% of gross wage) and social health insurance contributions (10% of gross wage) on the full amount of salary.

(Photo: Juan Moyano/ Dreamstime)

iulian@romania-insider.com