Last week, the President of Romania Klaus Iohannis signed a whole package of tax laws that increase levies and eliminate a number of financial reliefs for the IT, agricultural, food and construction sectors – reports Balkan Insight. Previously, Romania had been consistently reducing taxes for many years, an example of which is, among others, a spectacular decision from a few years agowhen Bucharest liquidated over a hundred at once taxes and fees.
Deficit up. Romanian companies are afraid of shock therapy
Now Romanian companies are afraid that after the elections, the new government will start a tough fight against the growing budget deficit. Perspective presidential elections and parliamentary affairs resulted in a sharp increase in spending. Experts estimate that it may increase the budget deficit to 8%. GDP this year – it says Reuters. The new government will face the difficult task of reducing the deficit below the 3.0 percent ceiling. set by the European Commission, and rating agencies and analysts expect tax increases. Entrepreneurs are afraid of “shock therapy, i.e. unexpected taxes imposed on the private sector,” he said Radium Burnete, head of the Romanian employers' association Concordia.
Entrepreneurs complain about wage increases and high energy prices
– Deficit at 8.0 percent. is dangerous because if something happens – war, some catastrophe – Romania will no longer have room for “borrowing” – he added and emphasized that employers would like to see a plan that will help “control the deficit”, also thanks to more rational spending by the state. Concordia is the largest employer organization in Romania – it represents companies from 17 industries, which together account for 26%. Romanian GDP.
Ratings agency S&P reported that Romania recorded one of the largest increases in real disposable income in the world over the past year. This was influenced, among others, by: 20% public sector pay rise, raise minimum wage and a significant increase in pensions. The head of Concordia warns that if wages continue to grow at this rate, there will be closures and restructuring of companies in at least 13 industries. He added that the Romanian economy was weakened by wage increases and high energy prices.