Business community makes its voice heard
On this note, the Foreign Investors Council (FIC) has expressed support for fiscal system reforms, but it emphasized that the Government should have consultations on this topic with the business environment. "The slowdown of the economy at the European level is also reflected in the latest data submitted by the National Bank of Romania (NBR) on FDI which shows that foreign direct investments in Romania have decreased by 13% in the first half of 2023 compared to 2022. The stability and predictability of the fiscal framework are vital criteria for private investments, as it results from the periodic analysis of the FIC on the perception of large investors in the Romanian economy," an FIC press release revealed.
Under the circumstances, FIC noted that the Government should "implement sustainable measures for the budget and the economy, aimed at ensuring fiscal equity, improving collection, adjusting imbalances, reducing the shadow economy, and stimulating private investments which is a solution to stabilize and constantly grow the economy. At the same time, those measures that can lead to the economy being blocked by discouraging investments or burdening citizens with hyperinflation must be avoided. FIC reiterates the need for Romania to have a holistic approach to the fiscal framework, fiscal-budgetary policies, tax administration, and wage policies."
FIC also pointed out that "the business environment is the engine of the economy and the main contributor to the state budget, we thus believe that all decisions with economic and fiscal impact should be taken through consultation with the private environment and based on studies and analysis that can estimate the impact in the short and long term."
In turn, AmCham Romania has warned that the proposed turnover tax would have a negative impact on the Romanian economy. "For companies, such a tax is an investment tax, not a turnover tax, as it will be covered by cutting investments," an AmCham Romania press release noted.
It also mentioned that "the new tax will reduce Romania's potential to attract significant new investments with high-added value and will affect Romania's plan and opportunity to become a regional hub for companies interested in participating in the reconstruction of Ukraine." The business association also pointed out that "adopting tax measures applied in other jurisdictions should also consider the level of digitization and the administration's collection capacity."
Besides that, exports are expected to be severely affected by a possible turnover tax. "Furthermore, the startups that we take pride in as a country and aspire to become future global unicorns will be among the most affected by a turnover tax, undermining their capitalization strength and internationalization efforts."
The final point argued that the turnover tax would also affect end consumers, "through reduced purchasing power and increased inflation."
In the end, AmCham Romania emphasized that fiscal-budgetary policy measures should "balance budget targets and equity, and ensure a predictable, transparent, and competitive investment climate."
It remains to be seen if the government will follow these recommendations. For now, please find more opinions and predictions about domestic and global economic and geopolitical trends in this issue of Business Arena. As always, we continue to keep an eye on all the developments affecting the business community.
Under the circumstances, FIC noted that the Government should "implement sustainable measures for the budget and the economy, aimed at ensuring fiscal equity, improving collection, adjusting imbalances, reducing the shadow economy, and stimulating private investments which is a solution to stabilize and constantly grow the economy. At the same time, those measures that can lead to the economy being blocked by discouraging investments or burdening citizens with hyperinflation must be avoided. FIC reiterates the need for Romania to have a holistic approach to the fiscal framework, fiscal-budgetary policies, tax administration, and wage policies."
FIC also pointed out that "the business environment is the engine of the economy and the main contributor to the state budget, we thus believe that all decisions with economic and fiscal impact should be taken through consultation with the private environment and based on studies and analysis that can estimate the impact in the short and long term."
In turn, AmCham Romania has warned that the proposed turnover tax would have a negative impact on the Romanian economy. "For companies, such a tax is an investment tax, not a turnover tax, as it will be covered by cutting investments," an AmCham Romania press release noted.
It also mentioned that "the new tax will reduce Romania's potential to attract significant new investments with high-added value and will affect Romania's plan and opportunity to become a regional hub for companies interested in participating in the reconstruction of Ukraine." The business association also pointed out that "adopting tax measures applied in other jurisdictions should also consider the level of digitization and the administration's collection capacity."
Besides that, exports are expected to be severely affected by a possible turnover tax. "Furthermore, the startups that we take pride in as a country and aspire to become future global unicorns will be among the most affected by a turnover tax, undermining their capitalization strength and internationalization efforts."
The final point argued that the turnover tax would also affect end consumers, "through reduced purchasing power and increased inflation."
In the end, AmCham Romania emphasized that fiscal-budgetary policy measures should "balance budget targets and equity, and ensure a predictable, transparent, and competitive investment climate."
It remains to be seen if the government will follow these recommendations. For now, please find more opinions and predictions about domestic and global economic and geopolitical trends in this issue of Business Arena. As always, we continue to keep an eye on all the developments affecting the business community.
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