2019 Budget: Revenues from “tax on greed” for banks and 2 pct turnover tax for Energy and Telecom companies are missing from budget

The state’s revenue from the 2 percent turnover tax for Energy and Telecom companies and the “tax on greed” for banks has not been budgeted in the 2019 public budget.

According to the document, the only revenues calculated from Emergency Ordinance 114, which should have also included the taxes mentioned above, are: a higher tax tax on gambling (additional revenues of RON 500 million), an increase of the tobacco excise (additional revenues of RON 600 million), the transfer of 35 percent of state-owned companies’ dividend income (additional revenues of RON 1,5 billion).

The government also estimates additional revenues of RON 2.1 billion from the sale of 5G licenses to telecom companies.

The government imposed, starting this year, a new 2 percent turnover tax for all Telecom and Energy companies and a “tax on greed” on the assets of banks in Romania, linked to the level of the ROBOR market rate, which has caused a lot of controversy.

The measure was approved in spite of The National Bank and the financial system’s opposition. A new 2 percent turnover tax will also be applied to energy companies. The two worst hit businesses are stated owned companies. Power Industry Oltenia, the biggest coal energy producer in Romania, will finish 2018 with a loss of RON 975 million. The new tax will add an additional payment of RON 85 million in the company’s budget. Transelectrica, the company that holds a monopoly on energy transport, reported RON 0.5 million in losses in the third quarter of 2018. The new tax will add an extra RON 15 million spending to the company’s budget.

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The government also approved that the gas price be capped for three years at RON 68 per megawatt/hour. The most affected are the companies exploring offshore gas in the Black Sea – OMV Petrom and Black Sea Oil & Gas. The two companies announced that they would decide next year whether they will continue investments in exploitation. After more than a decade, the National Regulation Authority in Communications will again charge communications operators for monitoring, from 0.4 percent to 3 percent of the companies’ turnovers.