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Iohannis: PSD's so-called tax reform has generated uncertainties that could affect investor confidence
President Klaus Iohannis said on Wednesday that the so-called tax reform approved by the Social Democratic Party (PSD), major at rule, has generated uncertainties that could affect investor confidence.
"There is a series of worries with the business community over the so-called tax reform imposed by the PSD. These are measures that have generated uncertainties that could affect the confidence of investors, which is also reflected in the economy of your county," Iohannis told a debate called "The Cities of Romania 100 years from the Greater Union. A smart future for Ploiesti," organized at the Oil and Gas University of Ploiesti, Prahova County.
He added that Prahova is a prosperous region, which is reflected in one of the highest Gross Domestic Products (GDP) in Romania, of 26.3 billion euros.
Iohannis pointed out that Prahova County has attracted foreign direct investment of 2.1 billion euros, which ranks it third nationwide, adding that it is a notable result generating optimism. He said unemployment in Prahova is 3 percent, much below the national average.
"Here, in Prahova, you have all the preconditions for high standards of living. The city of Ploiesti is today one of the most dynamic industrial and logistic hubs in Romania, and that is what explains its ambition to become a smart city where all resources are used for increasing the quality of life of its citizens, a city similar to what we admire elsewhere in Europe and the rest of the world. (...) A smart city is an attractive place to live and work, a community that makes it easier for people to access modern and high-quality public services. The concept of smart city also means (...) a more active involvement of the citizens in local government and community life," the President said.
According to him, public administration becomes increasingly more efficient through dialogue and teamwork, in close partnership with citizens, economic players, universities and the civil society.
"Communication and co-operation bring expertise that the administration cannot possess, no matter how modern and professional it may be, as well as a high degree of transparency and civic involvement," Iohannis said.
He pointed out that the local administrations should have a privileged relationship with the academe, research centres, and also work to attract valuable Romanian scientists who have left for other cities or other countries.
În his opinion, the Government must present some corrective measures in the case of the tax modifications, if determined to implement them, says Iohannis.
"The so-called tax revolution or reform is a concept brought up by the Social Democratic Party (PSD) and developed by the government. If they are determined to go ahead with these changes, then some corrective measures are required," the head of state said after attending the debate "Romanian Cities after 100 years from the Great Union. A smart future for Ploiesti" organized at the Petroleum - Gas University.
He argued that the government needs to intervene to settle the issue of mayors who fear that they will remain without money as a result of the implementation of the new tax measures.Further on, the head of state said that the Government must also present some "wise" measures for decentralization.
According to Iohannis, the existing legislation is a bureaucratic death to a great deal of small and medium-sized businesses, pointing out the need to create the right framework.
"At the moment, my impression is that the legislation allows large enterprises to grow, but it inflicts a bureaucratic death on a good deal of small and medium-sized enterprises. Being entrepreneur in Romania is hard now, and that is not normal. If we want to have a thriving economy, we must create the right framework," Iohannis told a debate called "The cities of Romania 100 years after the Greater Union. A Smart Future for Ploiesti hosted by the local Oil and Gas University.
He added that there is no guidance for those who want to start up a business.
"I think this is wrong. You cannot be a business man without knowing the basics of doing business, many have experimented on their own, but I think it would be reasonable to expect education to be provided for that. I believe that there are two areas where we need to act with wise government policies: creating a framework with a simple and transparent bureaucracy and, on the other hand, securing the possibility for people who want to open up their own business to learn somewhere about doing business," said Iohannis.
He added that business people are scared the most by unpredictable tax legislation and bribes, pointing out that Romania is a good location for investors.
"We have had quite lively discussions on the so-called tax revolution in recent weeks. Such developments are exactly what investors do not want (...) You should know there are two things that scare business people a lot: legislative unpredictability and bribes. If you manage to eliminate even the local part of unpredictability and bribes (...) then you will see that success is almost immediate," Iohannis told a debate called "The Cities of Romania 100 years from the Greater Union. A smart future for Ploiesti," organised at the local University of Oil and Gas.
At the same time, the head of state said that many investors from Europe are looking for profitable locations for their businesses, and Romania is a good place for them.
"Romania is a good location, but not all localities are well-seen because there are enough places where the administration does not really support investment," said Iohannis.