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Fin Min Teodorovici sends letter to S&P, vows replacement of the tax on financial assets by an annual fixed tax

Finance Minister Eugen Teodorovici says the ‘ordinance on greed’ will be amended, in a letter sent to Standard & Poor’s rating agency at the end of last week, mentioning changes related to ROBOR Index.

The minister did not publicly mention the means by which the ordinance will be amended.

The letter reads that “with reference to the concerns expressed in the rating report and in particular the negative effects of the bank asses tax, introduced through the Government Emergency Ordinance no. 114/2018 on the sustainability of public finances, the real economy and the investor sentiment of investors and the business environment, I would like to emphasize the following:

The General Council of the National Committee for macro-prudential Supervision, in its meeting on 4 February 2019, decided to set up a working group consisting of representatives of the Ministry of Public Finances (MFP) and the National Bank of Romania to analyze the implications of the tax on financial assets of credit institutions, introduced by GEO no. 114/2018. (…) Currently, the representatives of the Ministry of Public Finances are working to adjust the legal framework, as follows:

  1. The replacement of the tax on financial assets that is calculated by reference to the Robor Index with an annual fixed tax that will apply to a tax base of certain categories of assets, including the removing some financial assets from the tax base;
  • The tax will be adjusted downwards, depending on the developments registered at the level of the credit institution on the margin resulting from the difference between the interest rate on attracted deposits and redits granted on lei, as well as in relation to the increase of the financial intermediation;
  1. Replacing the ROBOR reference index (based exclusive on quotes) used for the credit agreements denominated on local currency with an index calculated exclusively on the effective interbank transactions, in compliance with the provisions of Directive 2008/48/EC of the European parliament and of the Council of 23 April 2008 on Contracts credit for consumers,” the letter reads.

Standard & Poor’s (S&P) confirmed the ratings for Romania over long term and short term in foreign and local currency at ‘BBB minus/A-3’ last Friday.

The rating outlook is under appeal and is to be announced in two weeks, a release from the rating agency informs, according to stirileprotv.ro.

The Romanian Government has appealed the S&P decision on the rating outlook and the agency has accepted the appeal.

The agency says conditions for such an appeal have been met.

 

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