Business milieu representatives present IMF anti-crisis measures

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Minister for SMEs, Commerce and Business environment (MIMMCMA) Constantin Nita met Monday evening with IMF representatives to present them the anti-crisis proposals that got the endorsement of the business environment in Romania, reads a release issued on Tuesday by MIMMCMA.

Among the examined measures were the non-taxation of reinvested profits, the scrapping of the minimum tax, the public short-term strategy regarding Romania’s economic priorities, investments in infrastructure, rescheduling of liabilities to the state, the re-capitalization of the Savings Bank – CEC and Eximbank, financing to the program of newly built housing.

Also, Minister Nita pointed out the issue of the too high interest rates charged by banks in Romania, as access to loans appears to be one of the major problems of SMEs.

IMF representatives said they are open to negotiations on these issues, the main aim being to find solutions that should be viable in the long term, but flexible in the short run too.

The IMF representatives said that during the negotiations with Romanian authorities, they are trying to keep a balance between structural measures envisaged for the development of economic activities and the financial resources Romania can dispose of.

‘We have the same desire, namely that the minimum tax is lifted. It is true that this tax brought the state budget collections three times higher than anticipated, but it also drove over 80,000 commercial companies out of business.

These had at least one employee each, which means 80,000 of jobless who, in their turn, were paying taxes.
For this reason, we believe that loss outweighs gains. One of the solutions to increase budget revenues would be, among others, increasing royalties on the exploitation of underground resources.

As for the reinvested profit, we consider that removing it would give labor, companies and the business environment in general an incentive. Without these incentives, we will never again be able to recover.

The companies are in a difficult situation, banks do not give out loans, demand is dwindling, and we took no decision to cut taxes,’ said Minister Constantin Nita.

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