Public Finance minister Sebastian Vladescu says he will supportthe capital market development through an entrepreneur educationprogramme and by floating the Property Fund, vaguely pledging tobring large state-owned companies on the Stock Exchange.
"We want to work with the officials of the Bucharest StockExchange to start a programme meant to teach Romanian entrepreneursabout the role of the stock exchange as a financing tool. We alsowant to boost T-bill volumes and the Property Fund floatationprocess is making headway. We will also stand by the Stock Exchangewith regard to the floatation of stakes belonging tostate-controlled companies to obtain funding," stated SebastianVladescu.
Fiscal incentives are not part of the list of steps the FinanceMinistry will take to support the capital market. Last year,profits generated from stock exchange investments and placements inmutual funds were not taxed, in the wake of a decision made byGovernment Tariceanu to support the capital market amid the massivelosses caused by the financial crisis. Starting this year,investors on the Bourse will again have to pay the 16% profit taxfor investments younger than one year and a 1% tax in case ofinvestments of more than a year.
"We are not talking about fiscal incentives for investors on theStock Exchange. I have voiced my point of view on previousoccasions and it hasn't changed. Investors must be equal in termsof taxation," stated Vladescu.
The tax on stock exchange profits was introduced in 2006.
"We all know we are cash-strapped. In 2008, when the profit taxwas eliminated, the situation was exceptional. Now, though, we alsohave an agreement with the IMF and each RON to the budget counts,"said Dan Paul, chairman of the Brokers' Association and BSEvice-president.
As early as last autumn, the BSE management started talks withFinance officials to extend the period during which the stockexchange profit tax is suspended by 3 to 5 years, to lure investorson the capital market. The current minister has resisted such amove, though.
After years of delays, the floatation of Property Fund, almost60% controlled by the Finance Ministry, "has better odds" to happenthis year, says Vladescu.
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