Press Review - July 4, 2017

07.04.2017 By Oana Gavrila

Minimum Wage Hike Boosts Unemployment

The number of jobless people grew in the past three months, following the minimum wage hike to RON1,450 as of February 1.

Economists say the rise in minimum wage is directly linked to higher unemployment and the correlation is very hard to avoid.

The unemployment rate grew to 5.4% in May, from 5.3% in April, statistics board data showed.

An estimated 478,000 people were unemployed in Romania in May, compared with 471,000 people in April and with 548,000 people who were jobless in May 2016.

Business Community Outraged by Planned Tax Changes

The government plans to overhaul the taxation system yet again, replacing a 16% tax on profit with a 1-3% tax on turnover, which would place one in three companies at risk of insolvency.

“Around 60% of companies in Romania will be unable to cover the tax burden following a tax on turnover. In the short run, the measure would increase tax collections but could trigger a domino effect. Large companies would be affected at first, and then smaller companies, which have business relations with the larger ones,” said Iancu Guda, president of the Romanian Association of banking analysts. 

Changes in the fiscal policy announced in the new government program generate turmoil in the business climate and severely affect the stability and confidence in the Romanian economy, which already pays the price of political instability, AmCham Romania said in a statement.

This debut of the new Cabinet that, before effectively taking over its mandate, announces a series of additional measures with a major economic impact, sends a wave of negative signals to the business community and potential investors, the organization said.(adevarul.ro)

PM To Check ANAF Over Poor VAT Collections

Prime Minister Mihai Tudose will check the tax authority ANAF at the end of this week, as VAT collections declined even though consumption has increased.

Sources familiar with the matter said Tudose has not yet decided whether to sack tax authority chief Bogdan Stan.

On Monday, the tax authority announced it collected RON101.15 billion in the first six months, 4.1% higher than in the same period last year. (adevarul.ro)

Liberals Would Welcome Ciolos to Join Their Party

Liberal Party president Ludovic Orban said it former prime minister Dacian Ciolos setting up his own political party would be “an uninspired decision” that would further divide the local political scene.

Orban said Ciolos is always welcome to join the Liberal Party if he wishes. (puterea.ro)

Romania Doubles Price of One-Day Road Vignettes

Romania's roads authority will double tariffs for one-day vignettes from EUR2 to EUR4, VAT included, as of July 4.

The authority announced the vignette issuance and control system may function problematically between midnight and 2 am on July 4. In this case, vehicle owners may pay until the end of the day to avoid fines. (puterea.ro)