Foreign Investors Council (FIC) in Dialogue about Taxation and Future Developments
The Foreign Investors Council (FIC) organized today, 7 March 2013, a Roundtable on taxation and fiscal policies. The guest speaker was Mr. Daniel Chitoiu, Vice Prime Minister and Minister of Public Finance. During the meeting, the most stringent aspects of the current economic environment, both as regards the overcome of the financial crisis and the measures necessary to stimulate economic growth, were analyzed.
The FIC considers that the increase rate of 5-6% per year, before the crisis, will be difficult to reach in the absence of major reforms aimed at attracting more investment and creating more jobs. Also, the FIC strongly believes in a better future. Romania has competitive advantages it may use to obtain higher increase rates which, in their turn, would attract more investment, and, consequently, a virtuous circle may be created. For this reason, the FIC considers that Romania's top priority should be to ensure a sustainable economic growth.
In this context, during the discussions, Mr. Daniel Chitoiu, Vice Prime Minister and Minister of Public Finance, stated that: "The sustainable development is synonymous with the development of a powerful private sector, autonomous from the political powers, which shall generate prosperity in the Romanian society and stimulate inclusively the reforms outside the public sector. The model of Romania's health economic development has to be focused on investment and turning to good account, in particular through exports, the competitive advantages that Romania may obtain in industry, energy and agriculture.
From a fiscal standpoint, the sustainability of public finances is imperative, by extending the taxation basis, in the context of a reform measures package of the fiscal system and administration, control and collection of budgetary income system.
In the short term, increasing the collection and reducing tax evasion are the imperatives of the fiscal and budgetary strategy. The State must become an effective, stimulating and fair state to the companies and citizens who honestly pay their fees and taxes.
In the fiscal and budgetary strategy plan, the changes must commence with a new approach of the relationship between the State and the taxpayer. This will mean to rethink and redesign the entire fiscal system. The major principles of this fiscal reform are transparency, simplification and reduction of the costs of fiscal compliance - at the level of economic agents, and the cost of fiscal administration - at the level of public authorities.
As we assumed, by rewriting the fiscal code and the fiscal procedure code by the end of the year, we will introduce the institutional order and clarity, and also the fiscal predictability that the business environment requires for a long time, as a matter of priority".
At the same time, the FIC's representatives expressed their willingness to contribute with professional expertise to achieving such objective. Serban Toader, President Fiscality Group FIC, stated that "the necessary elements of such fiscal policy are: (a) the development of a coherent fiscal strategy for the medium and long term with measures for re-launching the economy which shall be aimed both at increasing the income to the State budget, and supporting and sustaining the business environment; and (b) a better decisionmaking transparency corroborated with the maintenance and development of the partnership between authorities and taxpayers, in particular through a permanent and real dialogue with the private sector".
Daniel Anghel, Co-president Fiscality Group FIC, stated that "the FIC considers that a stable fiscal system is essential to attract investment in Romania. For this purpose, a legal and transparent decision-making framework is required, through which all new legislative measures shall be examined first in terms of economic impact, by consulting and involving the business environment, to be able to reach balanced solutions. A good consultative process in its early stages would lead to the strengthening of the strategy and fiscal laws in order to meet both the needs of the authorities and of investors in Romania."
The FIC appreciates the efforts of the Ministry of Public Finance to improve the consultative process with the business environment and considers that such will have positive results for the business community and the authorities. This process must be continued and developed so that dialogue may lead to the development of an optimum legislation, both for investors and taxpayers, and also for the State authorities.
The Foreign Investors Council (FIC) is an association of the leading investors in Romania. The FIC was established in 1997 when it officially began its activity with 26 companies as members. Today, the FIC has 123 member companies whose cumulated investments in Romania exceed EUR 35 billion representing approximately two thirds of the total foreign direct investment made since 1990.
The FIC includes multinational companies providing the Romanian economy with a variety of goods and services and creating almost 200,000 direct and indirect jobs.
In Top 10 largest companies by turnover, 8 companies are FIC members, and 37 member companies are included in Top 100 - as per the report "Major Companies in Romania" published in 2011, by IBP.