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AmCham Romania News The turnover tax is, in fact, a tax on investments

The turnover tax is, in fact, a tax on investments

by AmCham Romania September 14, 2023

Based on the signals received from companies and the analyses conducted, AmCham Romania draws attention to the fact that the turnover tax will have a negative impact on the Romanian economy for multiple reasons:

1. For companies, such a tax is an investment tax, not a turnover tax, as it will be covered by cutting investments. Although AmCham Romania member companies started the year optimistically with expansion and investment plans in both the short and medium term, the various forms reaching the public attention, the lack of transparency, and lack of a structured dialogue on concrete measures generate unpredictability for both Romanian and foreign investors. Investment plans are currently on hold.

2. Beyond the impact on each business, the new tax will reduce Romania's potential to attract significant new investments with high-added value and will affect Romania's plan and opportunity to become a regional hub for companies interested in participating in the reconstruction of Ukraine.

3. Adopting tax measures applied in other jurisdictions should also consider the level of digitization and the administration's collection capacity. Without performance in these areas, the introduction of additional taxes on those who are already paying only exacerbates imbalances, unfair competition, and frustration among good taxpayers. We reiterate our call for the modernization and digitization of the tax administration and for closing all avenues of abuse allowed by the current legislation.

4. In addition to investments, exports will also be severely affected by a possible turnover tax, an area where Romania already records significant imbalances that are deepening.

5. Furthermore, the startups that we take pride in as a country and aspire to become future global unicorns will be among the most affected by a turnover tax, undermining their capitalization strength and internationalization efforts.

6. Last but not least, although conceptually it is a tax applied to companies, the turnover tax will inevitably affect end consumers as well, through reduced purchasing power and increased inflation.

When analyzing the impact of a company in Romania or any country, the entire fiscal footprint must be considered, which includes the sum of all taxes and fiscal and parafiscal duties paid, not just the profit tax, which is only part of the story.

AmCham Romania emphasizes the need for any fiscal-budgetary policy measures to balance budget targets and equity and ensure a predictable, transparent, and competitive investment climate.

On behalf of the over 540 members, including American, international, and Romanian companies, we closely monitor discussions regarding changes in fiscal policy and remain open to substantive dialogue with decision-makers to convey the impact of proposed measures on the real economy.

>> RO: Taxa pe cifra de afaceri este, de fapt, o taxă pe investiții 

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