The measure is mandatory as of January 1, 2013 for companies with turnover of less than 2.25 million lei (EUR523,000).
“We are not willing and cannot afford to pay VAT on 400 bills. The Finance Ministry burdens me with VAT for 400 companies, when I can barely support my rolling stock plant. We are never consulted when such measures are taken, although we are the ones who generate money in the economy,” Blidar said.
This measure is disadvantageous for companies with turnover above RON2.25 million which are due to pay VAT when they issue a bill, not upon cashing the bill, but they can only deduct VAT corresponding to their suppliers after they pay the bills to their suppliers. In other words, Blidar will be able to deduct VAT for bills issued by small firms, the manufacturer’s suppliers, only after it pays these bills (beforehand Astra Vagoane Calatori could deduct VAT in the same month when it received the bill, irrespective of whether it had paid it or not).
Blidar said he cannot take the burden of the invoices from the 400 small companies for which the Government has implemented the measure of paying VAT on cashing the bill.
“The effect of this measure is not positive, as they are trying to convey, it is negative because this forces me to terminate contracts with 400 small firms, which will probably disappear from the market. They have almost 2,000 employees and mainly work with Astra Vagoane Calatori.”
Blidar explained that when a company offers them a rolling stock cable, the company gives them an invoice.
“For all the invoices I get, I pay VAT because of the measure involving VAT payment when cashing the bill. It is impossible for me to take [the burden of] 400 invoices. I prefer to bring the products that these small companies used to supply from abroad.”
Blidar said it is hard to predict this year’s turnover at Astra Vagoane Calatori because he does not know the direction the current government is going in, but hopes for a growth.
In 2011, Astra Vagoane Calatori posted turnover of RON106 million (EUR25 million) and profit of RON7.7 million (EUR1.8 million), down from the preceding year, according to Finance Ministry data. Astra Vagoane Calatori is the main supplier of passenger rolling stock for state-run railway company CFR Calatori. The company also has contracts with railway companies in Egypt, France, Iran and other countries to deliver rolling stock components.
Last year, Blidar won a EUR100-million contract following an auction organized in Brazil by one of the world’s largest companies, Vale. Blidar’s company will deliver almost 100 passenger rail cars to Vale.
(English version by Daniela Stoican)