Incentives stir disputes between ministries

After the Finance Ministry and the Small and Medium-sized Enterprises (SMEs) Ministry argued on the issue of SMEs’ turnover taxation, a new dispute looms ahead.

This time, the issue at stake is the intention of the Development and Prognosis Ministry to grant incentives to direct investments, as a draft law stipulates.

Development and Prognosis Ministry plans to propose to the Government a draft law to encourage direct investments, aiming to boost the economy and to maintain or create new jobs.

The numerous fiscal incentives stipulated in this draft law prompted Gheorghe Oana, State Secretary within the Finance Ministry, to argue that the draft law is unlikely to be endorsed in this form.

“This must be the Finance Ministry’s stance regarding this initiative,” Leonard Cazan, Development and Prognosis minister, maintained.

The draft law was submitted to trade unions, patronage and business circles for assessment several weeks ago.

Leonard Cazan declined to comment on the law’s stipulations until all the opinions were received. “I am waiting to receive all the replies,” the Development minister told Ziarul Financiar. He also specified that the legislative text would be wrapped up by the end of this week.

Gheorghe Oana argues that the facilities stipulated in the draft law would be “an unbearable burden to the state budget,” making the public debt absorb half of the revenues.

Neither the IMF agrees with these incentives, considering that the Government will be assaulted by further claims if it shows weakness in one field.

“The IMF feels that neither SMEs nor foreign investors should be granted incentives,” Gheorghe Oana told Mediafax. In his turn, the Development minister admitted that certain tax exemptions might be revised in order to forgo part of the incentives.

“We shall consider the Finance Ministry’s claims,” Cazan maintained. The Development minister yet hopes that the Government this month might approve the draft law, so that it can be sent to Parliament for endorsement.