ABSL Romania: Solidarity tax and turnover tax can have a negative effect on the Romanian economy

ABSL Romania, the Association of Business Service Leaders, analyzed the governance program proposed by the new government of Romania on June 29 (with reference to turnover tax and solidarity tax) and believes that their implementation will negatively affect Romania’s international competitiveness in the industry represented by ABSL, discouraging foreign investments in this area.

Moreover, ABSL Romania believes that this change will reduce the creation of well-paid jobs and innovation. Also the process of decision-making transparency and consultation with the business environment before adopting a normative act is very useful in the Romanian society.

The business services industry contributes significantly to Romania’s economic growth with more than 250 companies (109,000 employees), representing about 2 percent of Romania’s GDP.

According to KPMG’s annual industry report for ABSL, the business services industry is expected to grow constantly, with annual developing projections of 15-20 percent for the coming years, under conditions of legislative and political stability.

ABSL member companies believe that the predictability of the business environment is a key factor in the economic growth, and a radical change of the fiscal program without consultations with the business environment or without impact studies represents a serious risk to entire economy, having immediate effects on the development of our industry and the creation of new jobs.

Moreover, regardless of how big the salaries and their corresponding revenues to the state budget will be, ABSL says that for the citizens who are negatively affected by this initiative, the pension that they will receive from the Government will be limited in accordance with the legislation, leading to another inequality in the Romanian society.