Investors demand fiscal strategy

Romania still has no fiscal strategy published, so that companies could build their business plans around it, knowing exactly what taxes they will be dealing with in three to five years, the Foreign Investors Council (FIC) complains again.

“What’s most annoying is that certain ideas are released and then taken back. This is what happened to the flat tax – an interesting proposition from the Finance Ministry, which could have been a good starting point, but was quickly buried. We need clear indications as to where taxation is heading,” Jean-Pierre Vigroux, FIC’s chairman said. He added the Fiscal Code draft did not address this need, as it was only an attempt to put the entire legislation in this field together. “This is more of an organisational effort rather than an effort to point to where taxation is going,” Vigroux said.

FIC requests the Government to go public with its fiscal strategy for the proposed tax quotas for the next three to five years and make a clear statement as to when exactly it is going to fully adopt OECD’s principles on interpreting and implementing fiscal laws, as well as to when it is to adopt EU’s fiscal practices. So far, the Finance Ministry has told the press about a series of possible trends the profit tax, the income tax or the dividend tax might follow in the next five years, yet business people have trouble relying on these projections. Particularly because they have not been put in writing and the recent flat tax draft experience has made the business people even more suspicious.

The labour market flexibility, the establishment of a fair business environment and the enforcement of the law, as well as the devisal of a fiscal strategy are essential steps the Government can take in a short period of time without making too much of an effort, in order to stimulate foreign direct investments, FIC feels. “The new Labour Code is inflexible and is not suitable for those companies that operate by the market economy principles,” John Saunders, FIC deputy chairman said during the launch of a supplement to the White Book FIC publishes every two years.
razvan.voican@zf.ro