Lack of transparency and predictability, still major problem of business environment

If there is no transparency in drafting laws, the economy’s performance will not be optimal, investment decisions will either be postponed or reconsidered, gaps relative to the EU will become more difficult to overcome, and last but not least, Romania’s competitive advantages will count very little or not at all, representatives of the Foreign Investors Council (FIC) said at the Round Table on the Transparency and Predictability of Legislative Acts, organized yesterday.
The FIC’s main goal is to facilitate the dialog between decision-makers and investors and help them work together to find solutions toward improving the Romanian business sector, the post-event press release shows. FIC representatives have repeatedly underlined the importance of stability and predictability in the business environment, which would help draw long-term investments.
“Dialog between decision-makers and investors is absolutely necessary in creating the premises for sustainable economic growth. If measures are adopted without first having a transparent and open dialog with the business environment, it reduces the chances of transforming the recent economic performance into a sustainable, long-term result considerably,” Mihai Bogza, FIC President, stated.
“Why are laws being passed if they are not put into practice? Insufficiently justified legislative acts are still being adopted without quantitative and qualitative impact studies, and the legislation is frequently being changed, particularly in strategic fields like taxation, without offering a reasonable amount of time to implement them. The Romanian economic environment is seriously influenced by the impact lack of transparency has on the decision-making process, and this impact is also reflected in a constantly low level of direct investments in Romania,” Steven van Groningen, FIC Vice-President, stated in turn.
Consultations between the political and the business environment are vital
The president of FIC also stressed the need for political decision-makers to thoroughly consult with the business sector and other interested parties when making new legislative decisions. “Consultations must be real, not formal, and an impact analysis must be carried out. The regulations are not very clear. Investors require clear guidelines as to how certain rules should be applied,” Steven van Groningen added.
Given that a 3 percent economic growth was announced for 2013, Bogza believes it was not necessary to add pressure to the business sector. “If we take into consideration the 3.5 percent growth announced for the 2013 budget, it is unclear why it was necessary to add pressure to the business sector by introducing this special construction tax and increasing the fuel excise tax,” Mihai Bogza emphasized.
A series of situations were presented at the event, to exemplify deficiencies in the consultation process: the Insolvency Code, amendments to the Fiscal Code, and renewable energy or environmental protection regulations.
“In 2013, the Fiscal Code was modified 39 times and 282 articles under this Code were modified and supplemented, while the Fiscal Procedure Code was modified 21 times. The business environment wants a real consultation with respect to aspects that can affect the local business climate and sufficient time to revise these legislative projects. This will most certainly improve the quality of legislation and contribute to its uniform implementation,” Daniel Anghel, Co-President of the Taxation Group of FIC, stated.
In conclusion, the FIC representatives’ message to Romania was that it needs to align itself with the EU’s best legislative process practices. Increasing the transparency, predictability, and stability of legislative acts will in turn raise investors’ confidence levels in Romania’s business environment and economic competitiveness.

Leave a Reply