Coface head: Ordinance on microenterprises supports 90 pct of companies, but net impact is zero

According to Coface head Iancu Guda, the ordinance passed by the Grindeanu Government on Friday, January 6, which decreased taxes for microenterprises, will not have an impact, despite the fact that it will affect 90 percent of companies in Romania.

On Friday the Grindeanu government adopted an emergency ordinance that brings important changes in what concerns the taxing of microenterprises. The most important changes include the rising of the threshold up to which a company is considered a microenterprise, from EUR 100,000 prior to EUR 500,000. Concurrently, a new tax rate of 1 percent of revenues was introduced for microenterprises with one or more employes, while the 3 percent rate for microenterprises with no employees was maintained. Previously, the rate was between 1 and 3 percent, depending on the number of employees.

At face value, this ordinance supports approximately 90 percent of companies in Romania, microenterprises that record revenues below EUR 500,000 by diminishing taxes, with an estimated positive impact on the basis income of approximately RON 955 million, Guda said.

Despite this, the extra costs caused by the increase by 16 percent of the gross minimum salary, from RON 1,250 to 1,450 starting 1 January, completely cancels this benefit, Guda argues. Thus, the net impact on companies is zero, and, in reality, we are dealing with a redistribution, Guda added.

Georgeta Gheorghe

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