Consultants: The Fiscal Code serves only to raise revenues

With changes introduced through the new Fiscal Code, the Ministry of Finance is forcing companies to pay a minimum profit tax, and eliminates the possibility for Value Added Tax (VAT) on cars, fuel, and car parts to be deducted. Consultants and businesspeople indicated that these measures represent a significant fiscal burden for enterprises, and that many companies will soon be liquidated, to avoid such payments. Thus, real estate transactions, renting and leasing activities, wholesale and retail trade, hotels and other accommodation units, restaurants, legal and accounting firms, and companies in the food and beverage industry, will pay a profit tax worth a minimum RON 6,500 annually, according to an Emergency Ordinance on the budget correction in 2009 and the regulation of financial-fiscal measures. The new Fiscal Code stipulates that tax payers operating in the fields mentioned above, “who pay a profit tax less than 0.5 percent of registered revenue, are compelled to pay a tax of 0.5 percent applied on registered revenue, but no less than RON 6,500 annually.” Dan Schwartz, Managing Partner of the Scot&Company Romania consultancy company, told Business Standard that “these measures serve only to raise budget revenues, and none of these supports the business environment in any way.” The Secretary General of the Association of Romanian Businesspeople (AOAR), Cristian Parvan, said that the government’s proposals on taxation disregard talks between the state and the business environment.