Daily Newsletter - 9 November 2017


FIC (1)

Foreign Investors Council criticizes the shifting contributions from employer to employee measure (Source:

The conclusions of the FIC consultation process with its members: companies do not welcome this measure, because they do not understand its economic rationale. The Government did not carry out an impact study to quantify all its effects, which means that the risk of unintended consequences is extremely high. There is no certainty that once the contributions are shifted, there will be no new taxes on employers. The fluidity of fiscal policies makes planning difficult, and at the same time it raises the fear that, if misaligned decisions make public finances unbalanced, they will be repaired by tax measures taken inadvertently.

The Foreign Investors Council criticizes the shfting contributions from employer to employee measure (Source:

The Foreign Investors Council criticizes the shifting contributions from employer to employee measure (Source:

The Foreign Investors Council criticizes the shifting contributions from employer to employee measure (Source:


Macroeconomic News (6)

The sale of crops would be made through unitary contracts for all the farmers 

The sale of crops by farmers on the internal market or for export, will be made on the basis of some contracts established unitarily from the viewpoint of clauses and conditions for all the farmers, the Government decided today through an emergency ordinance. Pursuant to a Government communication, the measure was taken in order to strengthen discipline and increase partners' responsibility in crop trade.


The Ministry of Agriculture began to pay the subsidies worth 3000 euros to the tomato farmers who had committed to deliver during November-20 December 

The Ministry of Agriculture and Rural Development began to pay the subsidies worth 3000 euros for cultivating tomatoes in greenhouses to the farmers who had committed to deliver tomatoes in the second production cycle, that is during November-20 December. 195 farmers registered for receiving subsidies in the second production cycle took their money up to now, according to the officials of the Ministry of Agriculture.


Document: The Government has amended the Fiscal Code 

The Government has adopted the Emergency Ordinance amending the Fiscal Code, keeping all the provisions challenged by the business environment and trade unions lately. Some of the most important are: the transfer of most social contributions to the employee, taxing firms on the turnover below one million euros or the restrictions targeting the foreign companies and banks regarding deduction of interest expenses and indebtedness.


Exact calculations after the amendment of the Fiscal Code: The gross wage value must be raised by 19.9%, at an average gross salary of RON 3131, for the employee not to lose the sum "at hand". IT programmers and disabled people will lose anyway 

The gross wage value must be raised by 19.9%, at an average gross salary of RON 3131, for the sum received "at hand" by an employee to be preserved, but according to the calculations, the employees benefiting from tax exemption now, like IT programmers and disabled people, will bear a decrease in the net salary even if the employers raise their gross wages after the transfer of contributions at the level of the current overall cost, counts sent by Radu Derscariu, director of Deloitte Romania to after the Government amended the Fiscal Code, reveal.


Z DAY, transfer of contributions: four scenarios 

Scenario 1: The net wage remains the same. This scenario is probable in the case of multinational companies and of employers from Romanian small and medium-sized companies which record positive economic results. In order to maintain the net wage steady, the gross salary will have to be raised by 19.9%, which corresponds to the discussions prior to the announcement of the draft GEO stipulating the necessity of increasing gross salaries by 20% for preserving net wages. Also, in this scenario, the only 0.1% decrease in the overall personnel expenditure for the employer, from RON 5249 at 5244, is not a sufficient saving for justifying the administrative difficulties linked to the implementation of the new tax system, which is also shown by the recent statements of the Foreign Investment Council, which addressed an open letter to prime minister Mihai Tudose asking for explanations about the necessity of implementing this measure.

APAPR: Reducing the contribution for Pillar II at 3.75% means at least 20% lower private pensions 

Reducing the contribution for Pillar II from the current percentage of 5.1% at 3.75%, instead of increasing it at 6%, under the law, will mean at least 20% lower private pensions for Romanians, the Association for Romanian Privately Administered Pensions (APAPR) announced Wednesday. The Government has recently announced that it plans to reduce the contribution for Pillar II from 5.1% at 3.75%, as of next year. This measure would send a negative signal on the market and would affect Romanians' private pensions, according to APAPR.


Financial News (4)

Moody's has reviewed the ratings for deposits in local currency of Raiffeisen Bank upwards 

Moody's Investors Service reviewed the ratings attributed to the short and long-term deposits in local currency of Raiffeisen Bank, up from 'Baa3/Prime-3' to 'Baa2/Prime-2', a communication of the financial assessment agency shows. Raiffeisen Bank is the Romanian branch office of the Austrian group Raiffeisen Bank International AG (RBI). Also, Moody's confirmed 'Baa3/Prime-3' rating for long and short-term deposits in foreign currency, limited by the ceiling of the Romania's sovereign rating. The perspective of long-term ratings remains steady.


The number of debtors to banks and NBFIs rose to 679,660 in September 

The number of retail customers with arrears higher than 30 days to banks and non-banking financial institutions rose 0.53% in September, compared to the previous month, reaching 679,660, the latest data of the National Bank of Romania (NBR) reveal. These people had arrears worth over RON 7.54bn. The major part of the sum was in lei and euros, RON 2.98bn and EUR 3.11bn respectively. In the delay category, the highest value corresponds to above 90 days deadline, with RON 4.37bn.


Euro is sold for RON 4.7 at the commercial banks. The national currency, at its weakest level in the past 5 years 

Euro is sold for RON 4.7 at the largest banks from Romania, after the National Bank of Romania (NBR) announced Wednesday a RON 4.6198/euro exchange rate, the highest level since August 2012, against the background of the increase in social tensions. Thus, the third bank in Romania in assets, BRD, displayed Wednesday a RON 4.704/euros price, writes.


Banca Transilvania: We forecast the increase in inflation from 1.1% in 2017 to 3.1% in 2018 

Banca Transilvania forecasts the increase in inflation on short and medium-term, with the perspective of exiting the interval targeted by NBR in the second semester of 2018, provided an annual average inflation, on the EU harmonized index of 1.1% in 2017, 3.1% in 2018 and 2.9% in 2019. In that regard, the bank expects NBR to raise the monetary policy interest rate in 2018, a 3.50% level at the end of next year not being excluded.


Legislative News (1)

PICCJ - Opinion about the justice laws: The "block" dismissal of the Chamber's legislative proposals 

Prosecutors are for the "block" dismissal of the legislative proposals of the Chamber of Deputies to amend the justice laws, the Prosecutor's Office affiliated to the High Court of Cassation and Justice announced Wednesday.


Politics (2)

Political reactions to the "tax revolution" - PNL submits a vote of no confidence, USR tries to amend the Constitution 

The day when the Government adopted the amendments to the Fiscal Code challenged unanimously by the business environment and trade unions, PNL announced the initiation of a vote of no confidence in the Parliament, while USR announced it starts a campaign to collect signatures for amending the Constitution in order to prohibit the access of criminally convicted people to public office positions. The PNL leader, Ludovic Orban, stated Wednesday that the way Government Tudose acts "imposes the submission of a vote of no confidence as a requirement". "We will appeal to the support of each political party and of each parliamentarian", the PNL leader specified.


Nastase: Amendments of the tax legislation are needed, but they must be discussed; the president has the main responsibility 

The ex-prime minister Adrian Nastase says amendments of the tax legislation are needed from time to time, but he specifies that they must be discussed and president Klaus Iohannis has the main responsibility for the political dialogue.