A Big4 consultant warns: We might see changes in Romania’s fiscal code in the coming months

Aurel Dragan 23/08/2018 | 16:56

The pressure on Romania’s state budget is growing and even if we had a relative fiscal stability it is possible that in the coming months we will see changes in the tax area, said Dan Badin, fiscal and legal services coordinator at Deloitte Romania, the Big 4 firm, during a press conference.

“Everyone knows that taxation is the main source of revenue for the state budget and in this context taxation depends on many factors, depends on the economy as a whole, on how healthy the economy is, the economic growth, the pace of investments and so on, but it is also the first line of defense of officials in budgetary policies, and here the discussions can be very broad. We do not want to go into detail because it is not our specialization area, but it is obvious that our budget is beginning to be more and more under pressure and even if we have had so-called relative fiscal stability in recent months, it is possible that in the coming months, in the coming years, we will see changes in the tax area,” said Badin.

According to him, the economy does not show signs of increasing to the projected levels, those that have been budgeted, and if we do not achieve such a level of economic growth on the basis of which budget revenues have been calculated, with enough spending fixed, then there will be additional pressure

However, Deloitte Romania’s representative does not see increases in taxes or significant taxes such as VAT or income tax.

Badin argues that after a period marked by rapid changes in the Fiscal Code, the debate started in recent months with the business community gives a positive signal about the willingness to dialogue in order to adopt a more stable and predictable framework. The changes proposed by the business community concern mainly clarifications and remedies of some provisions that have a negative impact on taxpayers.

According to it, the adoption of proposals by the authorities also depends on the economic context. Many legislative initiatives and normative acts have an indirect impact on taxation as long as they lead to increases in budget expenditures that are not accompanied by better tax administration.

“At the same time, the investment climate also depends on other policies such as infrastructure, administration, education, labor market, etc. However, there is a deterioration in investors’ confidence in Romania’s growth prospects, and a rise in GDP below expectations will be reflected on the budget and then on taxation,” says Badin.

The representative of Deloitte Romania also said that in view of assuming the presidency of the EU Council, Romania should also analyze the European fiscal agenda, for example the common basis for the taxation of profits or the taxation of the digital economy. Until now, the Romanian authorities have not expressed their opinion on these issues and we do not know whether they have other initiatives, the impression being that they are going to accept the European proposals, said the representative of Deloitte Romania.

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