More and more micro-enterprises in Romania are facing the risk of closure due to high taxation levels, and by the end of the year, a wave of insolvencies could occur, warns Cristina Chiriac, the president of the National Confederation for Female Entrepreneurship (CONAF).
In a specialized debate, Cristina Chiriac emphasized that Romania is implementing short-term measures without a coherent strategy.
"Romania is now only focusing on finding the necessary patches to cover the gaps, without taking into account what is happening in the medium or even long term... I am afraid that by the end of the year, you will see a wave of insolvencies. The government won't even have to do anything in this segment of micro-enterprises because many are considering closing down, not just suspending their economic activities," Chiriac argues.
Lack of tax competitiveness
The president of CONAF criticized the lack of measures to stimulate the economy through tax competitiveness. "Many of the decision-makers implementing these measures do not understand how essential tax competitiveness is... From all these sets of measures, I have not seen any such measure that could revive the economy through tax competitiveness," the CONAF chief believes.
She warned that without these measures, "we must consider economic recession," as consumption - the engine of the Romanian economy - is showing signs of fatigue.
Maintained rating, but stagnant economy
Chiriac also mentioned the recent evaluation by Fitch, which maintains Romania's rating.
"We were pleased to maintain our rating, but we would have been happy if it had moved towards the positive. Romania's strategy should be based primarily on 2 years, not on 6 months, not on 3 months. If we are talking about reducing the budget deficit, we should prioritize digitizing the National Agency for Fiscal Administration (ANAF) to increase the collection rate," Cristina Chiriac believes.
Risk of relocating businesses across borders
In her opinion, the current level of taxation may push entrepreneurs to relocate their activities to other countries: "The Romanian entrepreneur... has several options and considers them all: changing their tax residence to Bulgaria, migrating elsewhere, or moving their economic activity altogether."
She pointed out that SMEs represent the backbone of the economy. "The vast majority of jobs are created by SMEs. The majority of budget revenues come from wage incomes, where the tax burden is one of the highest in the European Union," says Chiriac.
Cristina Chiriac believes that a pact between the Government, the business environment, and trade unions is necessary.