Ways to get more money with fewer taxes

Romania is one of the countries with the highest number of taxes in Europe, some 560. The minister added that tax evasion is still widespread in the country and admitted that companies often find loopholes to avoid paying taxes because legislation is full of these. Some 40 percent of companies officially registered losses in the past two years, and a mere 12,000 companies of the total 600,000 make up 83 percent of the budget revenues. In an attempt to ease the fiscal burden, which could determine more companies to exit the black or grey markets and start paying taxes, the government identified some 71 taxes that could be eliminated, because the collection costs are higher than money received. Businessman Florin Andronescu, founder of several companies, said that taxes should be lowered based on the size of profit, and that labor taxes should drop based on the number of employees. A measure currently under debate is the lump-sum tax (a fixed amount irrespective of changes in a company’s balance sheet) for certain fields. „When you want to bring part of the grey economy to the surface with measures such as the lump-sum tax you risk affecting many honest tax-payers,“ according to the Managing Partner of Tax House consultancy, Angela Rosca. The rate of profitability was 5.8 percent in Romania in 2007. Many companies manage to annul their earnings on balance sheets, in order to avoid paying income taxes. (S.C.)