Bucharest, 13 February 2014
The Foreign Investors Council (FIC) organized on 13 February 2014 a Roundtable on the measures for supporting the economic growth, having Mr Dan Manolescu, State Secretary for the Minister of Public Finance, as guest speaker. During the meeting, stringent aspects of the current economic environment together with potential measures necessary to stimulate the economic growth desired by both the investors and authorities in 2014 and following years were analysed.
Outlining the 2013 evolution of the Romanian business environment and general framework for the current economic environment, the FIC considers that Romania benefitted from an increase in foreign demand, especially reflected through the exports' volume. The increase in discussion followed a relatively generalized economic progress at EU member states' level. Also, the FIC considers that Romania has strong competitive advantages which, carefully exploited, would generate economic growth and attract more investment. For this reason, the FIC considers that Romania's top priority should be to ensure a sustainable economic growth.
As regards the fiscal aspects, during the discussions, Mr Dan Manolescu, State Secretary for the Minister of Public Finance declared that "the new Fiscal Code will solve a wide array of issues among which is the lack in correlation between the profit tax and income tax, issues which are present in the current version of the Fiscal Code. We intend to send the new version of the Fiscal Code to the Parliament and we estimate that the effective approval will take place somewhere in October this year. As regards the tax on special constructions, the net book value of the constructions will be taken into account for the computation. Moreover, taking into consideration that Romania places among the first countries as regards taxing the workforce, we analyse the possibility of capping the health contributions. The ceilings in discussion should be correlated with the minimum health package which is still to be discussed at Ministry of Health's level."
Going forward, as regards the FIC's approach for improving the tax legislation and taking into account the actual fiscal context, Mr Serban Toader, President of Fiscality Group FIC considers appropriate "fastening the application of coherent fiscal policy measures in order for the Romanian economy to derive real benefits. In this context, consistently complying with Law No 52/2003 regarding decision transparency represents a crucial step forward towards improving the consultation process. Unfortunately, the recent adoption of certain fiscal measures (for example the tax on special constructions) of great importance for the business environment did not take into account the provisions of the above mentioned laws, so once again we draw the attention on the crucial importance of a consultative process effective and beneficial for all parties involved."
Furthermore, Mr Serban Toader stated that "the FIC is supporting the Minister of Public Finance's efforts to reduce tax evasion through the implementation of a tailored set of measures, but also the stimulation of the companies' investment process by introducing measures such as the tax exemption for the reinvested profits. The tax and cvasi-tax measures must be adopted with the sole purpose of developing the economic environment as a whole but only after analysing their impact on the macroeconomic indicators."
Mr Daniel Anghel, Co-president Fiscality Group FIC, high-lightened the fact that "specific progress has been made by the regulation of specific measures destined to improve the Romanian economic environment, among which is regulating the activity of holding companies, import VAT deferment for authorised economic operators or the optional implementation of the cash-accounting VAT scheme." Also Mr Daniel Anghel mentioned that "the business environment needs boosting measures and not supplementary taxes. In this context, we reiterate the overwhelmingly negative impact casted down upon the business environment following the implementation of the tax on special constructions and the supplementary excise duties for fuel, impact which can cancel the positive effects of the aforementioned progress."
To conclude, the FIC appreciates the efforts and intentions of the Ministry of Finance to support the Romanian economic environment and believes that such efforts will have positive results for the business community and the authorities. However, the FIC considers that an appropriate solution for countering the negative effects brought by introducing new taxes and for maintaining the deficit within the limits agreed with the IMF, would be streamlining the public spending process and the activity of the state-owned companies.
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 25 companies as members.
Today, the FIC has 118 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 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, eight companies are FIC members, and 35 member companies are included in Top 100 - as per the report "Major Companies in Romania" published in 2013, by IBP.
Foreign Investors Council (FIC) - www.fic.ro