The banking system is strengthening its internal monitoring and control of risks, which could have both positive and negative effects. Clearly a strong banking sector is a prerequisite for a stable business climate, but the measure might lead banks to be more cautious about lending, with consequent negative effects on growth.
Reform in the healthcare system will hopefully resolve the health budget deficit, although at a likely cost of poorer services for patients, as public medical services can be expected to be dramatically reduced. It seems likely that the clawback tax on pharmaceutical companies will remain largely unchanged, hence maintaining this considerable burden on the sector and negatively affecting profit margins earned from the supply of both original and generic drugs to the public health system.
Reform in agriculture is still awaited. With the right policies, this sector could become a powerful engine of economic growth, supplying markets in both Romania and abroad with a wide range of products. Attention is now concentrated upon how the right of non-resident individuals to buy land in Romania will affect the system. Farmers and companies are keen to see measures adopted by the authorities to help their agricultural business develop and to reinvigorate this important sector.
Taxpayers are looking carefully at the likely tax changes in 2014. These should make payments and refunds quicker, and, in particular, should speed up VAT reimbursements. Currently, many taxpayers suffer significant delays in obtaining these, because the tax authorities usually carry out an audit before making any payment. So it is very welcome that a proposal is currently under discussion for VAT refunds of less than RON 20,000 to be made without the need for a prior audit.
Another new proposal is that rectifying tax returns of significant value will be required to be certified by an authorized tax consultant.
The special tax on constructions will generate a significant burden for companies in several industries where many such constructions are used. This can be expected to have an immediate negative effect on the profit margin of many companies. However, most likely, the impact will be cascaded down to the end-users.
Overall, many important changes can be expected this year in tax and other areas. We hope that the authorities will focus on efficiency in the tax system, as well as measures to encourage investment and growth in key sectors.