Fiscal consultants: A stable fiscal system offers incentives to the business world

The Government needs to ensure a stable business environment in Romania in 2011, without frequent and unexpected changes of fiscal rules, as has been the case in the last few years, with stability and predictability being even more important and more beneficial than certain fiscal incentives, say fiscal consultants.
According to experts' view, a VAT cut would be welcome, but will not be possible this year, and the flat rate will remain unmodified in 2011, but a reduction in social contributions could occur, depending on the budget revenues collected, which would be a good thing.
Consultants say a VAT cut would be more than welcome for businesspeople and for consumers, but do not anticipate a lowering of the flat rate considering the budget constraints and the need for revenues.
The VAT rate has been boosted in several EU countries and it is not expected to return to previous values, at least not until budget deficits fall below the target of 3% of GDP.
As for a prospective increase in the flat rate in order to raise more budget revenues, it would not be justified if the 2011 budget has been built on solid, prudent foundations. In addition, the flat rate in Romania is one of the lowest in Europe, so it is not very likely foreign investors will shun Romania if the income tax stays at 16%.