Romanian PM answers critics on government’s proposed taxes: Romania can’t be El Dorado for everyone

Romanian prime-minister Victor Ponta (in picture) recently said, as a response to the Foreign Investors Council’s (FIC) critics on Romanian government’s proposed taxes, that Romania “can’t be El Dorado for everyone,” adding that the tax on special constructions is applied across Europe. “It’s like that all over Europe. We can’t be El Dorado for everyone. If this is how it’s done all over Europe? Is there a tax that doesn’t exist in America or Europe? We have the lowest taxation, except for Bulgaria,” said the Romanian prime-minister, quoted by local Mediafax. He also stated that both the Foreign Investors Council and American Chamber of Commerce in Romania (AmCham), which criticized the government’s announced taxes, argued for Romania to have an agreement with the International Monetary Fund and the European Commission. In a recent statement, the FIC has drawn the attention to the negative impact of certain fiscal measures announced by the Romanian government, mainly the new tax on special constructions in the energy sector, telecommunications, utilities and infrastructure, and others. “The FIC expresses its members concern that policy makers did not conduct a proper consultation and did not perform an impact assessment on the consequences that would affect not only the direct taxpayer but also, indirectly, through the cost, the end consumer of the products of the industries subject to the new levy,” reads the FIC statement. "In FIC members’ opinion, these recent developments will only strengthen the opinion that the Romanian tax environment “is dominated by a total lack of predictability, an ingredient all too necessary for long term investment planning.” Moreover, this “lack of predictability” will make the FIC members reconsider their position on the local market and even redirect present and future investment “towards jurisdictions which offer a satisfying level of fiscal stability, at least in the medium and short term,” reads the FIC statement. Also, FIC believes that the implementation of the tax on special construction, together with the increase of the fuel excise and the 25 percent increase in royalties for mineral resources, except oil and gas, will have a major impact on some economic sectors of the productive industries. AmCham has also criticized the government’s proposed taxes, saying their “new wave of taxes” will lead to an unprecedented rise of fiscal burden for taxpayers. Irina Popescu, irina.popescu@romania-insider.com (photo source: gov.ro)