The Concordia Employers' Confederation has called on the Romanian Government to urgently eliminate the minimum turnover tax (IMCA), describing it as a "deeply harmful" fiscal measure that hits investments and threatens the country's economic future.
"The IMCA is not a fiscal reform. It is a brutal brake applied directly to the engine of economic growth. The financial statements of companies in 2024 clearly show that 61% of firms with a turnover exceeding 50 million euros are affected by IMCA in its current form. Around 20% were already recording losses before the tax was introduced, 10% went into loss solely because of IMCA, and 70% saw their profitability significantly eroded. This measure is strongly pro-cyclical, and many companies are making losses, being further penalised by a tax calculated on sales, not on profit," Concordia representatives maintain in a press release sent to AGERPRES on Tuesday.
According to the organisation, the main effects of the IMCA on the Romanian economy are: blocking new investments and expansion of existing companies; penalising exactly the economic behaviours the state should encourage - investments in production, innovation, networks and new capacities; and creating major distortions between sectors and companies.
In addition, the IMCA is deeply unfair because it taxes companies in loss and those that reinvest heavily in development, the employers' organisation shows.
"The most severely affected sector is commerce (45% of impacted companies), followed by manufacturing (25%) and professional services (20%). IMCA therefore strikes at supply chains, industry, and value-added sectors - precisely the areas on which Romania's competitiveness depends," the Concordia representatives further mention.
In their view, the scenario being suggested - the IMCA at 0.5% - "is not a solution, it is merely a makeover", as "reducing IMCA to 0.5% of turnover does not solve the underlying problem, it only delays it."
"Although the percentage of affected companies falls to 37%, the impact remains severe: 30% of affected companies are already making losses, which the IMCA worsens; 8% go into loss directly because of the IMCA of 0.5%; investments are penalised, and profitability is postponed," Concordia emphasises in the press release.
The employers' confederation further underline that the effective tax rates remain prohibitive "even for companies that avoid the critical threshold."
Furthermore, the scenario of extending the IMCA at 0.5% to the whole economy, by removing the 50 million euro turnover ceiling, would affect 35% of all firms in Romania, over 70% of which are already making losses. This would effectively generalise a tax on loss-making companies, targeting those in the most fragile financial positions.
"Concordia's position on this measure is clear and firm - we call for the elimination of the minimum turnover tax for all companies, regardless of size, and the abandonment of any scenarios for maintaining IMCA, even at reduced rates. The only responsible scenario is a return to a predictable fiscal system that taxes real profit, not economic activity itself. Romania can no longer afford to send investors a signal of fiscal unpredictability and hostility towards capital. Every day IMCA remains in force means delayed or cancelled investments, lost jobs, and missed economic growth," Concordia representatives warn.
The Concordia Employers' Confederation represents 20 of the most important sectors of the Romanian economy and is a nationally representative social dialogue partner. With a contribution of 30% to GDP and over 450,000 employees in 3,900 large and small companies, both Romanian and foreign-owned, Concordia is the only organisation in Romania that is a member of BusinessEurope, the International Organisation of Employers (IOE), and Business at OECD (BIAC).
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