Rising inflation, the budget deficit and the lack of economic predictability affect the competitiveness of the business services industry, thus limiting new investments, shows an analysis by the Business Service Leaders Association (ABSL) together with Deloitte Romania, published on Monday.
According to analysts, reducing the budget deficit is a macroeconomic priority, but complementary fiscal and budgetary interventions are also necessary. They believe that digitalising the tax administration would improve collection and reduce evasion, while streamlining spending and attracting European funds would relieve the state budget. At the same time, the economy could be stimulated without a direct budgetary impact by simplifying administrative procedures for companies and entrepreneurs.
"The business services industry generates significant revenues for the state budget, ranking in the top 5 sectors in terms of the share in GDP and employing over 200,000 people. The workforce in this sector is highly qualified and ranks among the best paid in the economy, contributing to the state budget both through taxes and duties and by stimulating domestic consumption. In an industry where relocation is easy, to regions with lower salaries or more attractive fiscal and legislative environments, Romania cannot afford to lose these investors. Therefore, the Government needs not only short-term solutions to reduce the budget deficit, but also a long-term strategy to protect an industry with high added value, connected to the latest technologies and which has some of the best specialists in the country," said Catalin Iorgulescu, ABSL vice-president, quoted in the press release.
According to ABSL, the business services industry is highly exposed to tax and legislative changes, given the global competitive environment and how easy it is to relocate to more attractive regions.
"We cannot ignore the resurgence of inflation, because, as salaries in Romania approach the regional average, an increase in them at the same pace as inflation becomes increasingly difficult to sustain. For this reason, we are observing an increased attention from our clients on total costs, which, in the case of service companies, are mainly generated by personnel expenses (salaries, training, etc.)," Alexandra Smedoiu, partner at Deloitte Romania, also stated.
Analysts also argue that Romania needs facilities to employ young graduates, increasingly affected by the disappearance of entry-level jobs, taken over by solutions based on artificial intelligence, as well as schemes to stimulate highly qualified jobs, which have proven effective in the past.
In recent times, taxes for freelancers have also increased in Romania, by adjusting the ceilings to income norms and health contributions. The state seems to limit these activities, sometimes suspected of replacing employment contracts, and controls will be intensified. Freelancers are also affected by the new rules on the capitalisation of companies. This context affects the activity of companies in the industry, the percentage of companies that use freelancers in their projects being approximately 18%, according to the ABSL report from 2024.
Most companies in the industry operate in Bucharest, Cluj, Iasi, Timisoara, Brasov and Sibiu.
The Business Service Leaders Association in Romania represents the business services sector, bringing together over 80 companies that operate in areas such as Shared Services Centre (SSC), Business Process Outsourcing (BPO), Information Technology Outsourcing (ITO), Research and Development (R&D). ABSL Romania includes both local and multinational companies in the field, regional and global leaders.
Comentează