Just when nobody thought it was possible anymore, the Ministry of Finance broke the news: the changes to the fiscal code announced recently will come into force as of April 1 and not May 1, as was given to be believed in a series of statements by the Romanian Prime Minister, Calin Popescu Tariceanu, and Romania's chief negotiator to the IMF, vice-premier Adriean Videanu.
The increase to 10% of the tax on income derived from interest payments and capital gains, the introduction of the 10% tax on real estate transactions and the increasing of excises - all will come into force as of April 1 thanks to an emergency ordinance the government intends to pass during the Thursday session. This means businesses will have only two weeks to acquaint themselves with the details of changes and their application.
The Tariceanu cabinet is making something of habit of adopting fiscal policy decisions in a hurry, despite their strong impact on the economy. The precedent was set with the introduction of the flat tax. The modifications will now be implemented by contravening two current laws: the fiscal code - article 4 of which on the stability and predictability of legislation will simply be ridiculed - and the law on decision-making transparency, whereby the Ministry of Finance is obliged to display the complete content of the draft normative act on its website and to send it to business associations, which have the right to make proposals.
Despite holding a news conference yesterday, Ionut Popescu, the minister of finance, refused to give any details as to the draft emergency ordinance he was planning to submit to the government for approval.
His boss, Prime Minister Tariceanu, said on March 3, as quoted by Mediafax: "We may modify the fiscal code after April 1, and in that case taxes will increase after May 1. There is no deadline beyond which these measures cannot be applied".
The idea of postponing the legislative changes was backed by Adriean Videanu at the time, "We have not finalised all the details on the supplementary memorandum with the IMF so it would not be right to modify the fiscal code now and have a new modification two weeks later," Videanu said while explaining the government's decision not to discuss the draft emergency ordinance in its March 3 session, despite having been allegedly finalised.
With the talks with the IMF on the reduction of the budget deficit having fallen through, the government no longer has anything to wait for and therefore decided to implement as quickly as possible the tax changes it began talking about - in many voices and with no clear information - in February after the IMF experts left.
As a result, despite there being only two weeks until April 1, neither representatives of business nor even tax consulting companies have been informed of the final version of the draft ordinance. Taxpayers have only a vague idea of what the tax increases in store for them will mean and are yet to learn anything certain about the elimination of certain previously deductible expenses or certain VAT exemptions, not to mention the enforcement guidelines for the new fiscal rules. razvan.voican@zf.ro
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