Gov’t gives up on lowering the cap for SMEs from EUR 1 M to half

Prime Minister Nicolae Ciuca announced on Friday, at the beginning of the Government meeting, that the Executive will not approve the lowering of the employment cap for small and medium enterprise (SMEs) from 1 million euros to 500 thousand euros, the measure that was planned to enter into force from 1 January. The Prime Minister also announced the main fiscal measures that the Government will adopt in today’s meeting for 2022.

“As I have seen a series of debates generated on the topic of lowering the employment ceiling as a micro-enterprise starting from January 1, 2022, from 1 million euros to 500 thousand euros, I would like to clarify this from now on. The government will not approve such an initiative. Romanian entrepreneurs need a predictable and friendly environment to develop and consolidate their business honestly. There is no need to charge extra and we discussed and analyzed, we will comply with the provisions of the application of the fiscal code”, said PM Ciucă.

“In today’s meeting, we will establish that from January 1, 2022, a 5% VAT rate will be applied for the delivery of thermal energy, both for the population and for schools, hospitals and other public institutions. The measure will be enforced during the winter months to mitigate the impact of rising prices. In addition to the “First House” program, we set a reduced VAT rate of 5% for a single home whose value exceeds the amount of 450 thousand lei, but does not exceed the amount of 700 thousand lei.

Supporting the business environment and allocating the largest investment budget for the last 32 years, from the perspective of the allocated amounts. Through the GEO we are adopting today, we will introduce a series of measures to reduce tax evasion and VAT fraud. Investors are encouraged to grow their business by ensuring a fair, equitable and transparent competitive environment among all market participants,” said the premier.

The Head of the Executive also announced that the act of withholding and non-payment of taxes and contributions with withholding tax will be re-incriminated.

“It is important to reintroduce these sanctions so that the money by which employers withhold them from employees’ salaries to be transferred to the state to health and pension budgets.

The government is observing its commitments to the European Commission to have a deficit of 6.2% of GDP on the ESA methodology next year, which is equivalent to a deficit of 5.84% of GDP on the cash methodology.

Another very important topic on today’s agenda is the National Anti-corruption Strategy, a strategy that targets the period 2021-2025. Romania needs a solid set of measures to prevent corruption, strengthen the integrity climate, increase the transparency of public institutions and increase citizens’ trust in state institutions. In this way, we achieve one of the important goals assumed by Romania through the National Plan for Recovery and Resilience in the judiciary sector”,  the PM added.