Businessmen met last weekend the head of the cabinet in a move to finding solutions to the economic downturn. Emil Boc promises lower tax on labour.
The government will modify the legislation concerning combating tax dodging, in order to eliminate “tricks” such as selling products at dumping prices below the price of excises, and in the next six months will perfect the standard tax statement system, Emil Boc stated after the meeting he had with businessmen on Friday, within the Finance Ministry’s HQ. The meeting focused on economic relaunch measures, Mediafax informs. The Premier assured them that the process of lowering the number of parafiscal taxes will continue this year too. At the same time the Head of Government reiterated the possibility of seeing labour costs lowered in the second half of the year depending on the economic developments.
At the same time, in the upcoming period the government will evaluate whether the facilities it offered to employers and employees through the technical unemployment procedure should be extended for this year too. Last spring the government decided to extend for February – December 31, 2010, the facilities it offered to employers on the basis of Emergency Ordinance 28/2009. The facilities consisted of exempting employers from paying their social insurance contributions for a maximum of 90 days in case they have to temporarily lower or shut down their activity. Their employees benefited from the same measure. The general consolidated budget’s financial effort is estimated at RON 439.2 M last year (of which a minus of RON 73.8 M in the case of income tax revenues and a minus of RON 365.4 M in the case of social insurance contributions) for approximately 200,000 employees that entered technical unemployment.
After their talks with the Head of Government, the employers revealed their list of economic relaunch measures. Thus, UGIR-1903 and CONPIROM presented Premier Emil Boc with over 30 proposals on how to stimulate the market and the companies’ activity, to encourage investments and to make work relations flexible. The list included the reduction of all fees and taxes, including the VAT. Employers demand a medium-term fiscal strategy, ensuring the stability of the Fiscal Code for at least 2 years and hastening the completion of the Fiscal Code’s norms of application. UGIR-1903 and CONPIROM also want to see the promotion of exports of products and services, support for the financing of the production of goods and services through state aid schemes applicable to the SMEs sector and the hiking of CEC Bank’s and EximBank’s capital. At the same time, in order to stimulate job creation, businessmen claim that employers should receive a subsidy of 50 per cent of the minimum salary for any new employee for 12 months’ time. The subsidy for any new employee that is a graduate of tertiary education should represent 50 per cent of the average salary.
cabinet, sole defender of flat tax
The government is the sole defender of the flat tax, the economic growth’s engine, but Romania is currently at risk of falling back to populism and empty promises that could cancel the effort made in order to adjust the public system, Premier Boc stated. He pointed out that the precautionary agreement that will be signed with the International Monetary Fund will focus on economic growth and on identifying solutions in order to draw in more financial resources for the payment of salaries and pensions. Following his meeting with investors in Romania, Premier Emil Boc pointed out that the problems experienced in tapping European funds are also generated by the impossibility of companies “that own only one handbag” to present to the banks the requested collaterals in order to obtain bank loans to co-finance EU projects.
“The problems appear because there are many situations in which projects are contracted by companies that lack financial coverage. There is the need for the government and the business environment to share responsibilities in tapping EU funds,” Boc said. The Premier pointed out that another discussion on the issue of European Funds will be organized this week.