Economic Regulations Passed in Romania
Bucharest has made adjustments to the Fiscal Code, due to come into force next year.
Daniela Budu, 28.10.2015, 13:27
In an Emergency Order on Tuesday the Government has added several amendments to the Fiscal Code, which will take effect starting January 1, 2016. These include a slash in the VAT for drinking water and water used in irrigations. Prime Minister Victor Ponta also announced that the revenues of micro enterprises will be taxed depending on the number of their employees.
Victor Ponta: “The turnover ceiling of micro-enterprises will go up from 65 to 100 thousand euros. The tax on revenue will stand at 3% if a micro business employs zero employees, at 2% if it employs only one employee and at 1% if it employs two or several employees. This way we support micro enterprises and encourage them to contribute to social insurance.
The leader of the Liberal floor group in the Chamber of Deputies Eugen Nicolaescu claims the amendments suggested by the Government are unacceptable and are simply an election ruse. Eugen Nicolaescu has warned against the negative effects of this law:
Eugen Nicolaescu: “This is the first blow the Social-Democrat Government has dealt to the business sector, in the sense that the law lacks predictability, sustainability and stability.
The Government also announced that tenders for procurement using public money or European funds will take less time and will also reflect quality criteria, not just the lowest price. These regulations are aimed at preventing certain contracts for major infrastructure projects from getting stuck. The opposition also claims that some provisions are missing or can be improved. The Liberal MP Gheorghe Ialomitianu, a former Finance Minister, says that while the legislation has always been in place, the problem was observing procedural regulations and the set deadlines. Ialomitianu says Romania risks not being able to access EU funds next year:
Gheorghe Ialomitianu: “Romania has a problem in this respect, and the strategy drafted by the Government makes no mention of procedures. Of course there are a number of good measures, such as cutting the deadlines for holding public tenders. The idea to come up with a strategy was good, but overdue, and may lead to delays in the absorption of EU funds.
The Government wants the new public procurement regulations to come into effect next year and will submit the modified draft law to Parliament for approval. According to a recent study of the German NGO Bertelsmann Stiftung on social rights policies, Romania is lagging behind at EU level in terms of eradicating poverty and eliminating social exclusion. In early 2013, an alarming 40% of Romanias total population was at risk of poverty or social exclusion.
