Tax instability is the greatest challenge in 2019, according to businessmen, reveals the 9th edition of the six-month barometer on the economy’s prospects – KeysFin Business Focus 2019.
According to the barometer figures, the unpredictability of tax legislation will significantly influence the investors’ appetite, both local and especially foreign investors, to open up new businesses.
“Those over 800 amendments to the fiscal legislation last year, culminating in the controversial ordinance on ‘tax on greed’ issued in December, have significantly influenced the investors’ perception about Romania’s economic development in 2019. According to the 9th edition of the half-year barometer on economic outlook, 82% of businessmen surveyed by KeysFin have pointed to uncertainty about taxation first in the top 2019 challenges. In contrast to the 2018 barometer, KeysFin experts have noted the increase in uncertainty on the fiscal outlook by more than 6%, a sign that the problems have increased in this segment. Last year, inflation was on the second place in terms of risks to the economy for the businessmen, in 2019 the decrease of investments is the main concern besides taxation,” reads the KeysFin release.
According to the document, 64% of respondents expect a fall in investment in the economy, amid the worsening macroeconomic outlook.
“57% of investors have indicated that credit is one of the main challenges in 2019. The ordinance regarding ‘tax on greed’ will force financial institutions to reconsider their businesses in Romania, and the consequences could be seen in more expensive lending and a reduction in lines of financing for the Romanian business. These will significantly influence the perception of foreign investors, and a downgrade of Romania by rating agencies is not excluded,” the analysis reads.
According to the barometer, the depreciation of the national currency (estimated by 43% of respondents), the financial deadlock (36%), the increase in utility prices (27%) and the labour market crisis (23%) were also listed as the main risks to the economy.
Investors also mentioned the “noise” on the political scene as the possible risk for the worsening of the global economic situation.