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Romanian carmaker Dacia workers protest government tax plans
November 7, 2017 / 5:28 PM / in a month

Romanian carmaker Dacia workers protest government tax plans

MIOVENI, Romania, Nov 7 (Reuters) - Thousands of Romanian trade unionists protested on Tuesday against the government’s planned tax overhaul, choosing the home of carmaker Dacia, the country’s biggest export, to make their point.

The Dacia workers union, organising the protest in Mioveni, joined the growing ranks of critics of the planned taxation changes, who include investors’ associations, unions, analysts and centrist President Klaus Iohannis.

Opponents have said the government’s plans could hurt the economy and risked breaching the EU rules on budget deficits.

Social Democrat Prime Minister Mihai Tudose said on Tuesday that the government was set to approve the changes via emergency decree at a meeting on Wednesday.

A draft decree released last week showed the changes include cutting income tax to 10 percent from 16 percent and lowering social security contributions while shifting their burden entirely onto employees.

Employers will also pay a 2.25 percent tax on their overall wage fund and small companies with annual turnover below 1 million euros will pay a 1 percent tax on turnover instead of the current 16 percent tax on profit.

If approved, the measures will come into effect on Jan. 1, giving employers roughly seven weeks to prepare.

In Mioveni, an estimated 6,000 workers from Dacia, owned by France’s Renault, and other car parts suppliers shouted “Unity” and “Down with the government” while urging the government to abandon plans to shift social security contributions entirely onto employees.

They also demanded better road infrastructure and labour laws.

Social security taxes have up until now been jointly paid by workers and their employers. Some fear removing payroll taxes for employers will effectively mean a pay cut for many private sector workers, as companies are not obliged to pass their savings on. (Reporting by Luiza Ilie and Virgil Oprina Editing by Jeremy Gaunt)

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