The government could decide in the coming weeks how it wants to adopt package 2, through separate ordinances or in the form of a package 2.2.0, through Parliament, with the intention being to preserve the fiscal measures taken in the summer, Alex Milcev, partner, head of the Tax and Legal Assistance department at EY Romania, said on Thursday.
"The fiscal packages and what is happening now. From market, from our discussions with the authorities, we know very well that the package has returned, it was rejected at the Constitutional Court on a matter related to magistrates, without any comment on the fiscal measures themselves. There were some appeals and the claim that the fiscal measures were also unconstitutional, but in the end the court did not rule. The logical question from everyone: what happens now? That is, will the government resort to emergency ordinances to pass those fiscal measures, instead of packaging them and sending them to Parliament again only to risk once again a potentially uncontrollable decision of the Constitutional Court and we wake up with the ordinance on December 26, as it was in previous years, always with a few exceptions? The bets are still open," Milcev told a media briefing.
He said that he has spoken with several party leaders at various meetings of the business community, with government and Parliament officials, and the parties do not have aligned fiscal agendas.
"The impression from these discussions was that we are moving towards a compromise and it is possible to see in a few weeks, maybe until the end of November, a consensus from a fiscal point of view and those fiscal measures will actually arrive as a package, emergency ordinance or in another form, a legislative act or maybe two, to reach the Official Journal directly, without passing like an omnibus package, with all the reforms. That is a working option. There could also be the package 2.2.0 option, again passing it through Parliament, pledging responsibility, obviously correcting the syncope identified by the Constitutional Court so that this thing is not repeated and to try once again to pass through the Parliament and potentially through the Constitutional Court, that we expect appeals again. These are two options. I think that in a week or two it will be clearer which of them the government is heading. The government's intention is clear to keep those fiscal measures from the summer, as we have seen the increase in VAT. It was promised to increase the tax on dividends. It is not yet in force. From January 1 there will be this change, from 10% to 16%. I would expect the government to consider the increase of other types of revenues to 16%. Why? Frankly, that 16% on dividends doesn't really make sense as long as the rest of the income is taxed at 10%. We are talking about rents, where you also have 10% and a flat rate that takes you to 8%," said Milcev.
He added that he expected to be a surge in the distribution of dividends until December 31 so that all entrepreneurs would catch the last 10-percent tax train.
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