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The rector of UPT, about the taxation of IT people

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The rector of the Polytechnic University of Timișoara, Florin Drăgan, claims that the elimination of the tax exemption for IT specialists could determine some of the current employees in this field to work in Romania for companies abroad.

Many IT companies abroad have already started recruitment campaigns, and their plan also includes employees from Romania. The coronavirus pandemic has made distance no longer an issue. Basically, people can work from home for outside companies because they will not require their physical presence in the office or in that country. When the income of IT employees will decrease, they will be tempted to take the step to outside companies. The IT market cannot support such a migration because it is a great crisis of specialists. On the other hand, there is a trend for high-income employees to make PFAs or their own companies where there is a different tax system. An elimination of the income tax exemption will make these trends increase and the taxes paid to the state will automatically decrease“, says Florin Dragan, rector of the Polytechnic University of Timisoara.

Politehnica Timișoara University has collaborated over time with both companies present in the west of the country and with state institutions to find the best solutions for the labor market. Many companies present in the west of the country have come in the last year to consult with UPT specialists for new investments.

When the financial specialists of these companies planned the expansion budgets, they took into account the tax base that existed at that time. Such a move would produce a real shock because in Romania, when you recruit a man, you negotiate the net salary. If the salary is taxed, you are practically proposing a lower income than what was planned in the budget and this can lead to a more difficult recruitment. In other words, the investments already announced could be affected or tempered. We can be put in the situation that the recent graduates of Romanian universities are directly employed by companies from abroad, to work for the offices there on higher salaries, and the labor crisis in our country is exacerbated“, says Florin Dragan, rector at the Polytechnic University of Timișoara.

Read more here.

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