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Mandatory minimum tax will clean up the economy, employers argue

The mandatory minimum tax will clean up the economy, because there are some tens, maybe hundreds of thousands of companies that do not operate rightfully, daily Business Standard quotes Chairman of the Association of Romanian Business People (AOAR) Florin Pogonaru as saying.

'Cleaning up is on the way!' exclaims Pogonaru, saying that this tax is also welcome because it corrects an imbalance in the market entry and exit of companies. The introduction of the mandatory minimum tax was determined by the existence of tens maybe hundreds of thousands of companies that do not operate rightfully and that are vehicles for paychecks or frauds, for instance the registration of stolen cars.

Romanian employers do not fully agree with this vision as far as the timeliness of the introduction of the tax is concerned. Deputy Chairman of the National Council of Small and Medium-Sized Private Companies of Romania (CNIPMMR) Florea Parvu claims that this is the most unpopular and anti-productive measure of the incumbent Romanian Government. Parvu says that all the 126,000 companies with a zero balance sheet in 2008 will close down or suspend business, which means that employers will no longer pay social security and unemployment contributions to the Government for the 126,000 accountants of these companies. At the same time, some 50,000 small companies will file for bankruptcy and generate at least as many unemployed. 'In the next days, the leadership of the Alliance of Romanian Employers' Associations Confederations will convene to decide how to challenge this normative act in court. Although they have mimed social dialogue, the Government has mocked us,' says Parvu.

'The mandatory minimum tax on corporate profit will not generate bankruptcies, but it will determine a rightful attitude on the part of taxpayers,' Finance Minister Gheorghe Pogea argued on Tuesday before a joint session of Parliament.

Lines at the Companies Registry for business suspension are getting longer by the day. Most of the suspension applications will be filed with the Companies Registry after May 1, when the companies realise the possible financial impact on the company's budget of the mandatory minimum tax, says Scot&Company Managing Partner Dan Schwartz. He also says that many companies will decide to wind up and become authorised individual traders, which is more advantageous in terms of taxation. 'As an authorised individual trader, there is only a 16-percent tax on the taxable income, without any tax on dividends or profit,' says Schwartz.

 

Sursa: http://www.rompress.ro

Tags: companies employers minimum mandatory

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