Internet providers on fiscal measures: Tariffs will grow, investments in 5G technology at risk

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The National Internet Service Providers Association in Romania (ANISP) argues that the over taxation of the industry by 3% of the turnover will have negative effects in terms of tariff increases and of slowing down the investments in new technologies such as 5G.

ANISP further says that the targets set for digitalization, the introduction of the 5G technologies, IoT, smart city, the covering of ‘white zones’ will all be missed and will lead to the slowing down of Romania’s economic growth.

The over taxation of telecommunications will lead to higher tariffs for end-users. Secondary, the increase of internet/mobile telecommunication services will slow down, the association says. Furthermore it will affect the competition.

“The profit margin of the largest operators is now on average 5%, sometimes turning negative. If this ultra-competitive environment receives a burden of 3% on turnover, some alternative operators will close down. As consequence, we will witness the decrease of budget revenues from taxes on wages, some will be laid off, and an exodus of the qualified staff to other countries of the European Union will follow,” the release reads.

It further claims that over taxation of telecommunications violates the Romanian and European legislation regulating the field.

ANISP expresses hope that the decision makers will consider the mentioned rational arguments and will give up the draft ordinance, It also expresses openness to dialogue and is ready to offer expertise to those interested.

Finance Minister Eugen Teodorovici announced on Tuesday that banks will be differently taxed, according to ROBOR (Romanian Interbank Offer Rate). The higher the index is, the higher taxes will be, says the new tax, called “the tax on greed”.

The FinMin announced this measure among other several fiscal measures envisaged for 2019, such as the EUR 10 billion investment fund, the decrease of taxes in constructions, but also the controversial decision to take the “vice tax”, which encompasses money normally intended for the investments in hospitals and to the big healthcare programmes to counter chronic diseases, and redirect it to the state budget to cover for the state employees’ salaries and for other expenses in the central administration.

He also announced the capping of the gas price for a three-year period: RON 68 megawatt/hour. The measure will apply until February 28, 2022.

In the case of Pension Pillar II: Funds can invest in public-private partnerships; administration fee drops from 2.5% to 1%; the second commission of 0.05% of the assets changes according to the fund’s performance; a person may withdraw the money, but not earlier than 5 years, and the withdrawal fee is 2% of the assets.

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