Minister Vasilescu: All public sector wage will go up by 25 pct starting January 1 2018

All workers from public sector will see their salaries go up by 25 percent from January 1 2018, said the minister of Labor, Lia Olguta Vasilescu.

Vasilescu said that currently the entire salary system from Romania requires RON 63.5 billion and on top of this RON 32 billion will be added until 2020 and an increase of RON 10 billion/year is supported by the state budget.

„We made some computations and it seems that the forecasts that we have after three months at the Government are even more optimistic than we expected. Also the effect of the salaries increase is that there will be more money collected to the state budget and I can say that for 2018 all the pensions and salaries increases, included the ones adopted until now, will amount to RON 16 billion, RON 10 billion for salaries and RON 6 billion for pensions as RON 3.5 billion will come from the contributions affiliated to the salaries increase by RON 10 billion. Therefore from RON 10 billion that the state pays, RON 3.5 billion will come back to the state,” says Vasilescu.

She added that to these amounts are added RON 2.7 billion as an effect to the second round of the inflows of RON 12.5 billion, respectively the salaries without contributions.

„In the moment the salaries increase, the consumption increases automatically, as people will consume their money on basic goods  and all these lead to the second round effect, which mean again taxes and collected taxes by the state,” said Vasilescu.

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She mentioned also that an amount of RON 1.8 billion in extra taxes will come from the increase in the minimum wage.