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Influence Of The Social Contributions On The Enterprise Behaviour

Author

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  • Mihaila, Nicoleta

    (Centre for Financial and Monetary Research “Victor Slăvescu”, Romanian Academy)

Abstract

The current fiscal system comprises a multitude of taxes, dues and contributions which the enterprise has to pay. The large number of taxes and dues to be paid put a high fiscal pressure on the enterprise and the social contributions are a determining factor in the manifestation of the fiscal behaviour of the enterprises. The employer has to pay to the state a significant proportion of the gross wage of the employee, almost 30%, which includes: the contribution to the social insurances, the contribution to the unemployment fund, the contribution to the Single National Fund for Health Social Insurance, the contribution to the guarantee fund for wages, the contribution to the health insurances, the contribution to the fund for accidents and the fee for the Chamber of Labour. The employee must also pay the state a total of 32.5% which consists of the contribution to the social insurances, the contribution to the unemployment fund, the contribution to the health insurances and the income tax. A simple calculation shows that the net income of the employee from his/her gross income is much lower than the revenue to the state from this wage. The state charges a burdening 45% on each job, while the employee earns almost 55%. This percentage is an obstacle for business development in Romania, where the labour force is overtaxed. Within this context, the pressure presumed by any increase of the minimal national wage is very strong for the employers and it generates unemployment, informal work and tax evasion.

Suggested Citation

  • Mihaila, Nicoleta, 2012. "Influence Of The Social Contributions On The Enterprise Behaviour," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 16(2), pages 189-202.
    • Handle: RePEc:vls:finstu:v:15:y:2011:i:4:p:189-202
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    References listed on IDEAS

    as
    1. European Commission, 2010. "Taxation trends in the European Union: 2010 edition," Taxation trends 2010, Directorate General Taxation and Customs Union, European Commission.
    2. European Commission, 2008. "Taxation trends in the European Union: 2008 edition," Taxation trends 2008, Directorate General Taxation and Customs Union, European Commission.
    3. European Commission, 2011. "Taxation trends in the European Union: 2011 edition," Taxation trends 2011, Directorate General Taxation and Customs Union, European Commission.
    4. European Commission, 2013. "Taxation trends in the European Union: 2013 edition," Taxation trends 2013, Directorate General Taxation and Customs Union, European Commission.
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    More about this item

    Keywords

    fiscal pressure; social contributions; fiscal behaviour;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm

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