The announced hasty adoption, without consultations and impact assessments, and the potential economic impact of the proposed measures, reverse the country’s macroeconomic performance, and isolate Romania from an investment perspective.
With regard to the replacement of the profit tax with the turnover tax beginning with January 1, 2018, AmCham said it considers such a measure inappropriate, making Romania the only EU member country to apply such taxation system for all categories of taxpayers. Moreover, the proposed measure conflicts with the new EU Directive currently under public debate, Common Consolidated Corporate Tax Base – CCCTB, thus placing Romania outside the mainstream EU countries.
With regard to introducing a global income tax for individuals, the organization reiterates that such a mechanism is not feasible at all. The poor IT infrastructure of ANAF, both in terms of hardware and software makes its implementation and application impossible. Any change of such magnitude calls for longtime preparations in advance and massive investments in the IT infrastructure, training for specialists and taxpayers at large. Furthermore, all existing ANAF processes and IT systems are programmed for the flat tax, in accordance with the ANAF modernization program financed by the World Bank. Any change will waste the projects implemented so far and will call for new investments that need major budgetary allocations.
With regard to the transfer of the payment obligations of social security contributions from the employer to the employee, the organization considers that at this moment, such measure will generate a lack of transparency and clarity for both categories of taxpayers. Correlated with the need to increase salaries, this measures will have a financial impact difficult to assess for the employer and employee.
With regard to the solidarity tax, the fact that it is in place in several EU countries but doesn’t bring forth the expected results, speaks for itself about the efficiency of such a tax that will eventually lead to difficulties in the financial management of individuals. Some of the effects that can be expected include the migration of affected taxpayers towards more favorable tax systems.
With regards to the royalties for additional profits for the oil industry, given the strategic role of the energy sector for Romania, any such change should be preceded by broad consultations with all stakeholders and must be aligned with the sectorial strategies Romania committed to, including the tax implications that have been under public debate for many years.
With regards to the removal of the pensions II pillar, even if it remains a statement, is a dangerous precedent of Government interference in the private sector, which triggers economic, financial, confidence and reputation damages for Romania, especially at the level of the capital market in a very important moment for its development. This is a practice that does not belong in a free market economy, as it breaches the fundamental private property right, AmCham said.
This debut of the new Cabinet that, before effectively taking over its mandate, announces a series of additional measures with a major economic impact, sends a wave of negative signals to the business community and potential investors.