In the first few months of the year we rejoiced at the flat tax, while there was a feeling that our politicians would keep their electoral promises and not hesitate when it came to doing the right thing for the economy and the voters. Things look quite different now, however, since in order to compensate for insufficient budgetary revenues, an increase in VAT is now needed and the expanding current account deficit requires some restrictions on consumer lending. Other measures may be necessary later, including postponement of the cut to social security contributions. In view of the situation, this week”s issue of BUSINESS Magazin set out to discover what business people feel about the government”s performance over the first half of the year and what they expect from the politicians in power.
“In terms of economic performance, I would say things have gone well. Budget revenues were not so bad, and the flat tax has pushed fiscal revenues into the open somewhat, as well as some of the underground economy,” says economic consultant Bogdan Baltazar.
Marius Ghenea, CEO of the Flanco retail chain, uses his company as an example in which the introduction of the flat tax had positive effects on two fronts: sales growth and higher net incomes for all employees. “We”ve had sales growth with payment in full partly due to the introduction of the flat tax. This did not influence purchases by instalments all that much, because the lending system remained the same,” he says.
On the other hand, the new fiscal philosophy was implemented in an unpredictable way, which saw decisions being revoked no sooner than they had been announced and postponement and hesitation that cost the business environment dearly.
Today the business community is angry because the initial intent of the new government to help business through its fiscal initiatives has been slowly sabotaged by a number of conflicting decisions that proved detrimental to the economy. crenguta.nicolae@businessmagazin.ro
Cristaxi and Cobalcescu, two of the main taxi firms on the Bucharest taxi market, which currently has almost 10,000 cars, are planning to invest millions of euros in upgrading their fleets to Dacia Logans and Renault Clios. “There”s a trend on the taxi market in Bucharest at the moment of replacing the cars because new cars and pleasant drivers have become very important on a market that has doubled in terms of the number of licences issued over the last two years,” says Ilie Anghel, chairman and majority shareholder of Cristaxi, one of the largest players on the taxi market in Bucharest with almost 1,000 cars. Market data shows the number of taxi licences to have nearly doubled since 2003, from 5,500 to 9,500. Anghel, who is also one of the founders of the Chamber of Taxicab Drivers of Romania, says there is a plan to modify the law pertaining to the taxi business to stop new companies entering the market with cars that are more than three years old at the time they register their business.