Tax on reinvested profit kept

Dropping the reinvested profit tax is not an efficient step to take, as it is discriminatory, the Finance Ministry says in an answer to the requests of the representatives of various SMEs. “Evaluations prove that this system set to encourage investment and used under the Romanian profit tax legislation in the past is now rendered ineffective by its discriminatory nature, as it cannot be applied to the taxpayers with ongoing investments that usually do not make any profit,” the Ministry says. The Exchequer representatives explain this incentive was replaced with another way to stimulate investment, i.e. with a 20% deduction from the actual investment or the possibility to opt for speedy amortisation of technology, computer and computer peripheral purchases. As for not levying taxes on the profit made by the companies creating jobs, the Finance Ministry says such a system would be hard to manage. ZF