Romania is facing a difficult economic context due to the high energy prices, inflation, and geopolitical instability, the foreign investors say.
“The Foreign Investors Council – FIC considers that the current budgetary challenges must be solved through a series of sustainable measures for the Romanian economy, measures aimed at addressing current problems, but without damaging the country’s economic future by overburdening companies or generating a perception of regulatory instability, and by doing so discouraging private investment and reducing the competitive advantages.
The stability and predictability of the tax system must be a priority for the authorities in order to maintain a strong and attractive business environment. Only in these conditions will the private sector be motivated to continue investing in our country and to provide jobs for its citizens. Any change in the fiscal framework without impact assessments and dialogue with the business community could compromise the potential for economic development, which is mainly based on attracting foreign direct investment,” reads a press release.
As resulted from the latest FIC Study, the taxes paid by the FIC member companies have a significant direct contribution to supporting the State budget, the economic growth registered in Romania, as well as to building wealth. The results show a detailed picture of the major contribution of large Romanian companies with foreign capital to the state budget, the most important indicator being the level of VAT collection, which is the highest. The report/study provides details regarding the contribution of a representative sample of Romanian companies with foreign capital to tax revenues through the level of taxes paid to the state budget.
“Possible measures that do not require additional financial effort from companies and would supplement the budget revenues are mechanisms that increase voluntary compliance, reduce tax evasion, and improve the collection through the digitization of ANAF. The billions of euros related to PNRR should be absorbed with greater determination in order to continue investing rapidly and to carry out the planned reforms – including tax reform by increasing the revenue collected by the tax administration. Foreign direct investment can make a significant contribution to economic growth and therefore we reiterate the need for legislative measures dedicated to attracting foreign investment, considering this area a priority for the next period,” FIC argues.
- The analyzed sample includes 44 Romanian large companies with foreign capital, cumulating together more than 105,000 employees (23 of them are among the top 100 largest companies in Romania in terms of turnover, and 6 of them are part of the top 15 banks in terms of the value of assets).
- The companies have been registered and paid taxes in Romania for more than 25 years. Their investments with high added value began, on average, in the late 1990s, which highlights the long-term commitment of these companies to Romania.
- In one year, 2019, the investments of FIC companies were over 17 billion RON, which represents 57% of the value of the capital expenditure carried out under the consolidated state budget.
- The 44 FIC member entities transferred to the Romanian budget VAT and excise duties with a value of approximately RON 30 billion, representing 30% of the total VAT and excise duties collected by the state (RON 97 billion).
- The analysed companies also made payments of over RON 11.3 billion to the Romanian budget, more than half representing social contributions and profit tax in 2019.
- In 2019, on average a net wage of an employee from FIC member company was RON 5,810 per month, over 70% higher than the average net wage in Romania of RON 3,340.
- The analyzed companies pay both the salaries and the taxes and contributions of their employees on time, and all their employees receive their salaries and bonuses through bank accounts. Thus, FIC companies contribute to the reduction of the “grey economy” in Romania.
“We reiterate the openness of FIC member companies to contribute to a constructive dialogue with the authorities in order to find together the most suitable measures to ensure economic sustainability and recovery in a transparent and predictable manner,” FIC concludes.