Finance minister announces important measure for healthcare NGOs; organisations react

Anca Alexe 06/03/2018 | 17:27

The Public Finance Ministry might increase the 2 percent allocation of individuals’ income tax dedicated to healthcare NGOs to 3.5 percent, according to minister Eugen Teodorovici.

Teodorovici said: “Helping these NGOs that support those with special needs as their main activity has to be done. Otherwise they can’t do what they have to and achieve the purposes for which they were created. The PM and I have decided that all the issues they have raised be centralised in the following two weeks in order to look at every issue closely.”

He added that are several possible scenarios for growing the percentage of the income tax which can be redirected to organisations, and that the measure is meant to compensate the reduction in the income tax from 16 to 10 percent.

Mirela Nemtanu, CEO of Hospice Casa Sperantei, had a positive reponse: “HOSPICE commends the Public Finance minister for considering to raise the percentage of individuals’ income tax that can be redirected to foundations, organisations or associations. This measure was proposed ever since last year by the NGO sector, with the introduction of fiscal measures that would reduce financing for NGOs. The measure proposed by the NGO sector comes as a compensation to the reduction of the income tax level from 16 to 10 percent, so that the activity of these organisations is not affected. We hope this measure is implemented as soon as possible, so that NGOs which rely on support from the community will be able to continue their work.”

On the other hand, Carmen Uscatu, founder of Daruieste Viata foundation, says that the more important measure to be taken regarding the current 2 percent form is allowing individuals to submit it online. Currently, the form can only be submitted online with an electronic signature, which actually costs more than the money donated through it so people generally send it via post.

“There also needs to be more transparency on the donation procedure because NGOs have no idea who is donating and how much, and there is no way to retain donors by contacting them directly to encourage them to donate in the following years. Our NGO has not been involved in a 2 percent campaign until now, but we have received some small donations through it,” added Uscatu.

Carmen Uscatu also says that the ministry should introduce the option for companies with turnovers below EUR 1 million to donate 20 percent of the revenue tax they pay. Until last year, all companies paid profit tax and had the option of redirecting 20 percent to NGOs, but the new fiscal policy requires that small companies pay revenue tax instead, but still only profit tax-paying companies are allowed to redirect to NGOs. Therefore, many organisations are expecting to lose money this year due to this measure, which has had a lot more impact than the 2 percent forms sent by individuals.

In the past years, according to Carmen Uscatu, Daruieste Viata had around 1,500 companies that donated through the 20 percent of profit tax procedure. This has accounted for around 90 percent of the NGO’s incomes – but the organisation has not been able to calculate the impact of the change in fiscal policy, because they don’t know exactly how many of the companies that donated before had a turnover of less than 1 million euros, but the general impact estimated for NGOs is around 20 percent.

Melania Medeleanu, president of the MagiCAMP association, said: “The measure is a natural correction: it does nothing else but maintain the famous 230 Form at the value it initially had. Since the income tax was reduced from 16 to 10 percent, the amount represented by the 2 percent each each employee could use to contribute to a social cause was also much smaller, so it was a significant hit for the budgets of non-governmental organisations.

Although MagiCAMP is among the beneficiaries of this fiscal correction, Mr Teodorovici talks about the application of this measure only for healthcare NGOs, and I can’t help but think about the thousands of other NGOs that help poor children or elderly people, who are now the victims of an enormous injustice.”

Medeleanu also talked about the necessary changes in the way companies can donate to NGOs: “These corrections should also be directed towards the fiscal facility that targets companies. Through the changes made in 2018 to the fiscal code, only companies with a turnover of over 1 million euros can still redirect 20 percent of their profit tax to a social cause. Therefore, some 400,000 small companies that have not reached this threshold but want to contribute to organisations that help in areas where the state is not able to, can no longer do so due to the legislative changes.”

 

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