The additional taxation of those that already pay taxes, called by the representatives of the governing coalition “of solidarity”, appeared overnight, before the draft budget and is a measure that would slow down the recovery of the economy after the pandemic and harm Romania in the long run, say members of the Concordia Employers’ Confederation.

“If the budget is not well managed, it will never be enough. If the Government makes uninspired investments, no matter how much the tax increases, it will still not have enough money. In this context, the solidarity tax only gives a chance to those who do not respect their obligations towards the state and to derail the course of some businesses that keep the Romanian economy in motion,” it is mentioned in the release.

According to Concordia representatives, the solidarity tax risks having a boomerang effect, because it could become a consumption tax, collected from companies, but also paid by citizens.

“It is important to understand that most large companies work with a margin of a few percent. A 1% tax on turnover can be half of the profit made,” the statement said.

At the same time, the members of the employers’ confederation consider that overnight taxation, without in-depth analysis, figures and dialogue, will only deepen the problems, not solve them. Moreover, any discussion of tax increases should be accompanied by measures to reduce tax evasion and streamline collection, which could bring more money to the budget than additional taxation of good payers.

“Social dialogue is a tool that can ensure a correct projection of the money that Romania can use to develop itsefl. It is time to respect the law and count in the experience of the social partners in a budget calculation that affects us all. Seven billion euro are lost by VAT poor collection rate, and the first choice is to tax the good payers. We represent more than 2,000 companies, and we know from experience that you first make sure that the budget you have is managed correctly, money are not lacking without justification and only after you have done all these steps you should think if it has to grow and from what sources,” the quoted source mentions.

The Concordia Employers’ Confederation also states that it brings together 14 key sectors of activity, approximately 26% of GDP and is a social dialogue partner, and the executive has a duty to consult with it before taking measures that have an impact on society as a whole.

“The predictability of taxation is an essential element, especially at a time when many costs have become unpredictable. It is time to have a constructive dialogue on all issues concerning the development of the Romanian economy. Concordia members want to have a dialogue and are always open to debate and discussions, even when prohibitive taxes are proposed. We can explain what works and what doesn’t. It is essential that these measures take into account all the relevant points of view, not be decided arbitrarily, overnight. Public consultation on both the budget and the subsequent measures is needed,” the representatives of the organization claim.