The government plans to hike the minimum statutory wage to RON 3,700 (EUR 740, gross terms), prime minister Marcel Ciolacu confirmed, without saying whether this would be done by July or later this year. Currently, the minimum wage is RON 3,300 (EUR 660), meaning that the new hike would amount to just over 12%. 

Speaking of the income taxation plans to be enacted at a later moment, PM Ciolacu elaborated on his previous hints about personal deductions made available to low-income earners as an alternative to progressive taxation.

The prime minister, quoted by Ziarul Financiar, explained that, in order to avoid a conflict with the Liberals [who firmly oppose progressive taxation], "we will not come up with progressive taxation on the salary, instead, deductions will be given for those with lower incomes. The range [of deductions] will be broad."

But PM Ciolacu implied that the intention is to obtain progressive taxation with alternative means.

"You cannot pay the same tax rate on the minimum wage as well as on very high wages," pointed out Marcel Ciolacu.

iulian@romania-insider.com

(Photo source: Inquam Photos/Octav Ganea)