Romania’s ruling party leader criticizes foreign companies ‘hiding profit’

Liviu Dragnea, the leader of the ruling Social Democrat Party (PSD) has again targeted multinationals, arguing that they hide their profits. Large companies active in Romania have a “huge turnover” and low profits, which means they hide their profit, he claimed. He made the statements in a TV interview, less than two weeks since targeting “banking greed” and a week after the Government adopted an emergency ordinance that brings new taxes for banks, energy companies and telecoms. “We are talking about large companies, with a huge turnover, of billions of euros, and which have very, very low profits, of 1 percent or 0.something percent, and, of course, we will have to see how we help some of them. In Romania they have a very high turnover but low profit, which means there is a management problem; we should apply the Ordinance 109, it means that they do not have very good managers. Not all of them. I think now of Coca Cola, a mega company. Why doesn’t this company hide its profit? It is of 14 percent, meaning it is very accurate. And why are there other companies with 1 and something percent? Banks, companies in the energy sector, retail chains. I am absolutely certain they hide their profit,” Dragnea said in an interview with Antena 3, quoted by Agerpres. He said he hoped that a list with the turnover of all foreign companies active in Romania will be available at the beginning of next year so as to see that profit tax that was paid in the country. “So we know how we stand. I’m not crazy, I’m a bit of a patriot and I believe that we have the same rights as others in other countries. […] We are talking about billions of euros that have been hidden in the way profits are exported,” Dragnea said. The PSD leader gave the example of a “large store chain in Romania” which prefers to purchase products from a plant in Bahamas rather than from Romania and to export the profit there. “If it bought from here, the profit would stay in Romania. And it goes to Bahamas, where there is a problem with the tax haven […] This is one way to export the profit here,” he said. Dragnea also said that the tax agency ANAF should restructure itself so as to be able to perform efficient checks on large companies. In the same interview, Dragnea tackled the country’s foreign policy, arguing it “is not managed properly.” He said he asked foreign affairs minister Teodor Meleşcanu to present an analysis of the economic results or advantages for the Romanian state resulting from the activity of the ambassadors but did not receive it. “I don’t think our foreign policy is managed properly, I really don’t think this. And I don’t think our ambassadors are tasked with a very specific set of objectives. […] Any EU or US ambassador in Romania goes without any reservations, some with a lot of nerve, to ministries so that a certain company wins a bid. Some even write. This is novel information. They write: this or that company needs to win […] Our ambassadors need to have a mandate,” Dragnea said, quoted by