The National Council of Small and Medium Private Enterprises in Romania (CNIPMMR) representatives declared that the 2019 draft budget is fragile and unbalanced and the money provided for the business environment are not enough. The draft foresees a budget for the Ministry of Commerce and Entrepreneurship diminished by 29.8 percent compared to 2018.
For the national programs run by the Ministry of Business Environment it is set a budget of RON 545.5 million in budget credits, under the value of 2018 when it was RON 865.03 million and for 2020 it is foreseen a budget of RON 431.1 million.
The Government also modified the allocation for the Start-Up Nation program in 2019 in the state budget project, after initially the Ministry of Public Finance provided sums for signing contracts with only 2,220 firms, although the state had promised 10,000 winners. Even so, the budget for this program was reduced compared to the sums allocated in 2018. According to Annex 3/60 of the draft budget for 2019, the budget appropriations related to the Start-Up SME Start-Up Program Nation – Romania are down from RON 778.89 million to RON 383.59 million.
Another program affected is the Program for the development of market services activities, from RON 49.95 million in commitment credits in 2018 to RON 15.39 million. At the same time, for the National Program of micro-industrialisation, the commitment credits decrease from RON 74.36 million to RON 22.67 million.
The program for stimulating the establishment and development of micro-enterprises belonging to young entrepreneurs no longer has any commitment credits, but only budget credits of RON 8.9 million.
Contradictions between statements and figures
SME representatives say that while acknowledging the importance of prevention – the Governing Program 2017-2020 explicitly states: “One of the basic principles of the Romanian Economic Code will be prevention. In this way, we will introduce legislative provisions (the Law on Prevention) which will oblige the authorities with control responsibilities to proceed first and foremost to the education and training of entrepreneurs of any kind, as well as to the prevention of mistakes of any kind. This in fact means that an economic agent can no longer be penalized in any way if he has not been guided and prevented before. Basically, we remove the red card awarded and we replace it with two yellow cards. In the draft State Budget Law Draft 2019, there are significant increases in revenues from fines, penalties and confiscations (37.52 percent versus 2018).”
Also, CNIPMMR representatives say that although the Governance Program 2017-2020 talks about simplifying bureaucracy and reducing administrative costs, the draft State Budget Law Draft 2019 foresees significant increases in tax revenues (“taxes on the use of goods, the use of goods or activity “, an increase of 257.13 percent is projected for 2018).
What do SME owners propose:
- Reviewing the national budget relative to the priority areas for the European Union budget in 2019 and increasing the amounts intended to support growth and jobs;
- Increased funding allocated to programs for SMEs;
- Funding for preventive measures instead of significant increases in fines, penalties and confiscations;
- Increasing public investment to support economic development as well as launching large investment projects to address poor or low-quality infrastructure, one of the most problematic factors for developing a business in Romania, a barrier to trade commercial and economic development, with Romania still ranked last among countries with similar characteristics in the region in terms of perceived quality of transport and communications infrastructure;
- Funding to simplify bureaucracy, support growth, create jobs, attract investment instead of significant increases in non-tax revenue.