Romanian Govt. 's plans to tighten corporate taxation prompts criticism

Addressing the government's plans to enforce tighter fiscal corporate taxation treatment (under the so-called "fiscal adjustor" mechanism), the president of the business association AmCham Cristian Sporis claims that the "urban legend" about companies avoiding to pay part of the taxes owed for their activity, by using [or abusing legal] "fiscal procedures" remains unless demonstrated political rhetoric.

The government's plans to enforce the "fiscal adjustment" mechanism prompted criticism related to the negative impact it might have on investments.

The president of the Chamber of Fiscal Consultants, Dan Manolescu, explained for Radio Free Europe that this concept of "fiscal adjustment" starts from a premise of bad faith, namely that companies seek to erode the taxation base by more or less real expenses.

Even if this is a real possibility [and Dan Manolescu doesn't deny it], the Romanian Tax Authority already has the option to check and prevent this, the head of the Chamber of Fiscal Consultants said.

"They [the policymakers] believe that through those expenses, [part of the] profit is extracted from Romania, through consulting, IT, [not real[ expenses. The problem is that no one checks and controls them. According to the current legislation, ANAF has the possibility to actually prove that the respective price is correct. We have an inability to control and enforce rules that we already have."

(Photo source: Juan Moyano/Dreamstime.com)