Romanian business associations urge government to preserve current tax system
<p>A coalition of eleven Romanian business associations, including Concordia, the Foreign Investors Council, Romanian Business Leaders, and various bilateral chambers of commerce, has issued a joint appeal calling on political parties to maintain the country's current tax framework and prioritise structural reform over immediate tax increases.</p>

<p>The business groups argue that the focus should be on eliminating special taxes - such as those on turnover and specific assets - and narrowing tax exemptions while ensuring fiscal consolidation through streamlined public administration, more efficient public spending, and improved absorption of European funds.</p>

<p>"Honest companies should not have to pay to cover the deficit caused by irresponsible management of public finances," the joint statement said. The message calls for predictability in fiscal policy and opposes any abrupt increases in corporate or labour taxation that could disrupt economic activity.</p>

<p>While the appeal reflects long-standing concerns from the business community over fiscal instability and administrative inefficiency, it comes at a time when Romania faces mounting pressure to close a widening budget deficit, which heads towards 8.6% of GDP this year versus the 7.0% target.</p>

<p>The government is currently engaged in political negotiations over its fiscal strategy, with rating agencies and the European Commission monitoring developments under the Excessive Deficit Procedure. Economists have warned that structural reforms, while essential, are unlikely to generate the revenue needed in the short term to stabilise public finances.</p>

<p>The associations' position underscores their resistance to what they see as reactive fiscal measures, instead promoting a longer-term approach focused on reducing tax evasion, rationalising state expenditure, and restoring trust in governance.&nbsp;</p>

<p>However, several economists and public finance experts argue that given the urgency of the fiscal situation (a strategy should be endorsed by June 20 and enacted by end-June to prevent disciplinary measures by the European Union), broad-based tax increases - including adjustments to VAT, income, and corporate tax rates - may prove unavoidable.</p>

<p>Political pressure to address social equity concerns also complicates the situation, as voters have expressed discontent with past administrations. Many officials from those governments remain involved in shaping the current policy direction, raising questions about the feasibility and credibility of reform efforts.</p>

<p>Representatives of the business associations are advising president Nicusor Dan in the process of negotiating a fiscal consolidation package, raising questions about the social fairness of the process.</p>

<p><em>iulian@romania-insider.com</em></p>

<p><em>(Photo source: <a href="https://www.dreamstime.com/">Juan Moyano/Dreamstime.com)</a></em></p>