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GEO amending the Tax Code, published in the Official Gazette

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The Government’s emergency ordinance (GEO) amending the Tax Code adopted on November 8 has been published in the Official Gazette on Friday night, romaniajournal.ro reads.

“Promoting this regulatory document is mainly determined by the need to enforce the fiscal measures encompassed in the ruling programme, the 2018 budget draft law, to provide the predictability of the enforceable fiscal framework for the business environment in 2018 and to introduce some consolidation measures of the returns in the fields of the tax on the micro-enterprises incomes and VAT,” reads the GEO.

The ordinance stipulates the decrease of the number of social contributions from nine to three, as well as amendments on the way of taxing companies, particularly the SMEs, and the decrease of the income tax from 16 to 10 per cent.

The National Liberal Party chairman, Ludovic Orban, stated on Friday that his party would notify the Ombudsman to challenge the GEO to the Constitutional Court after it is published in the Official Gazette. Orban argued the Ombudsman Victor Ciorbea has the obligation to defend the Romanian citizens’ rights.

I am sure that we’ll not be the only ones to notify the Ombudsman on the GEO, there will also be the trade unions and the employers’ associations,” the Liberal chair said.

President Klaus Iohannis sent a message Thursday evening stating that it is a great injustice that the businessmen’s efforts are cancelled by uninspired fiscal policies.

“It is obvious that, in an unstable business environment, entrepreneurship is struggling not only with the economic uncertainty inherent in business, but also with the unpredictability of government policies. In order to avoid such a climate, the preparation and good faith of political decision-makers are essential. I believe that it is a great injustice that your business efforts and plans are cancelled by uninspired tax policies, insufficiently argued or even lacking economic fundamentals. I believe that these practices should cease,” the message presented by Presidential Advisor Cosmin Marinescu on the occasion of the 24th edition of the ‘National Top Companies’ Gala at Romexpo.

Iohannis pointed out that the business environment can only thrive through responsible, coherent economic policies that will solve the present problems without generating much more serious ones over long term.

“Although these requirements for the good functioning of the business environment are known, I regret to note that despite the appeals to the need for economic predictability, including on your part, the Government has chosen to change essential tax provisions less than two months before enforcement. It is unacceptable the fact that the businessmen cannot make their business plans because of the confusing, unstable fiscal policies and as if they are at the sole discretion of a few decision-makers, which is why we have always urged more openness of the authorities to dialogue and partnership. After all, the business environment must be a partner and even a vector of change for the better, not the victim of a change at any cost,” the head of state added.

The head of state underlines that there are serious concerns because of the fall in foreign direct investment by almost 20% during the first eight months of the year, but also of the fall in the public investments, which are in a continuous and obvious regression. He said that capital spending in the first nine months of the year fell by about 20% against the similar period in 2016, which deepens the investment deficit in general.

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