Twelve business groups warn: Minimum turnover tax discourages investment, erodes competitiveness

Maintaining the minimum turnover tax (IMCA) is a form of taxation that discourages investment, erodes competitiveness, and negatively impacts both Romanian and foreign investors, twelve business organizations in Romania warned in a joint statement sent to AGERPRES on Wednesday.

"The representative organizations of the Romanian business environment express their concern regarding the continued application of the minimum turnover tax (IMCA), a measure that discourages investment, undermines competitiveness, and affects both domestic and foreign investment. In a global economic context marked by slowdown and a challenging domestic budgetary situation, Romania needs coherent and predictable fiscal policies that stimulate private investment and productivity, as well as structural reforms to eliminate waste and address the causes of current imbalances. Inconsistency in decision-making — reflected in sudden policy shifts — sends contradictory signals to investors and increases the perceived risk of Romania's economy. Romania must reduce its deficit below 3% by 2030. This goal cannot be achieved solely by increasing taxes (on individuals or companies), but requires complementary measures: reducing state spending, improving tax collection, and digitalizing the administration. Such efforts can only succeed in parallel with sustainable economic growth, which this tax risks discouraging. Without concrete measures in these directions, achieving the objectives remains impossible," the statement reads.

According to the organizations, turnover taxation has created market distortions, affected key sectors, and, through the uncertainty and additional costs it generated, contributed to Romania's underperformance in attracting new investors compared with regional markets.

"Although introduced as a temporary measure, maintaining the IMCA also raises questions about revenue collection. Available data show that approximately 1.2 billion lei have been collected, compared with an initial estimate of 6 billion lei; future volumes are likely to be even lower against the backdrop of slowing economic activity. Furthermore, the IMCA contradicts international best practices and fiscal governance standards, which focus taxation primarily on profit and economic substance, not turnover. As we have conveyed in dialogue with the Romanian Government, the business community considers eliminating the IMCA vital to reversing the trend of economic stagnation. The private sector wants and needs to be a trusted partner in addressing public finance challenges, not a target for penalties. Without a thriving business environment, reducing deficits and achieving Romania's economic recovery is not possible," the statement notes.

Against this background, the signatory organizations stress that the real solution for strengthening public finances lies in prioritizing structural reforms.

"Once again, we call for political consensus on prioritizing structural reforms — the true solution for consolidating public finances. Without digitalizing the tax administration, tackling tax evasion, and improving public spending efficiency, additional tax burdens risk stalling the economy and companies' ability to generate budget revenues. We believe macro-fiscal balance must be a shared goal, requiring cooperation from all stakeholders, including responsible collaboration within the governing coalition, beyond political agendas or short-term interests. The signatory organizations remain open to dialogue with the authorities and reiterate their commitment to contributing to Romania's economic growth and fiscal objectives, supporting the long-term development of the national economy," the statement concludes.

The position on the IMCA was endorsed by: FIC - Foreign Investors Council, AmCham - American Chamber of Commerce in Romania, Concordia - Employers' Confederation Concordia, RBL - Romanian Business Leaders Foundation, CCIpR - Italian Chamber of Commerce in Romania, CCIFER - French Chamber of Commerce and Industry in Romania, BEROCC - Belgian-Luxembourg-Romanian-Moldovan Chamber of Commerce, NRCC - Netherlands-Romanian Chamber of Commerce, AOAR - Romanian Businesspeople's Association, AHK - Romanian-German Chamber of Commerce and Industry, CCE-R - Switzerland-Romania Chamber of Commerce, and BRCC - British-Romanian Chamber of Commerce.