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BNR's Isarescu: Turnover tax would do for a small business, a restaurant or eatery
The turnover tax is applicable to a company that does not generate value added, one that does not run many production chains, governor of the National Bank of Romania (BNR) Mugur Isarescu said on Tuesday citing a restaurant, an eatery or a small business as fittest for this type of tax.
"This is another case that proves the importance of debate, a serious debate, not one to discourage action by rushed accusations like: 'the turnover tax is a catastrophe', but a thorough debate to show how the turnover tax can be matched with the VAT. Because the VAT is also a tax on turnover, only that it's levied on the value added. So what are we at, rushing with verdicts and skipping debate? Yesterday, at a press conference on monetary subjects, I was besieged with questions on tax issues. I asked them: 'Why don't you discuss with the Finance experts?' That's the power of dialogue and of the debates I came to hear. The turnover tax works for a business that does not create added value, does not run many production chains, isn't that so? A bottom line business that buys something, sells something else, of the sort of a restaurant, an eatery, a small business anyway. (...) This was the great revolution about the VAT and the difference between the sales tax — as it is called in the US — and the VAT in Romania", Isarescu told a specialist conference.
The BNR governor said on Monday that the idea of the turnover tax had not emerged from BNR representatives and the media should seek answers at the government, adding that he believes all this hyped-up "speculation" is politically-driven.
The BNR governor also voiced his opinion that governments consulting central bank experts would be a good idea.