The Foreign Investors’ Council, the business association comprising 130 members that have created over 180,000 jobs in Romania, have launched a new edition of its White Book, a strategic document that includes recommendations aimed at improving the overall business environment.
The document covers the main areas of interest for investors such as the fiscal framework, the management of public institutions, labor, education, energy and financial services.
“Romania can become one of the top 10 economies in 20 years,” said Eric Stab, the vice president of the FIC and the CEO of Engie Romania.
The main areas of focus from the perspective of FIC members on Romania’s development are the development of infrastructure of all kinds, be it roads or digital investments, human capital development alongside education and healthcare, but also public and private efficiency.
Stab commented that one of the common concern of foreign investors is the scarcity of talent in all sectors.
“There is a tremendous shortage of construction workers in Romania,” said Gustavo Navarro, the managing director of CRH Romania and board member at FIC.
Among the recommendations made by FIC on infrastructure there is the creation at government level of the Program Implementation Unit, which would be designed to track all the status of all investments in infrastructure across Romania.
Moving to the fiscal framework, the White Book points out that Romania’s tax collection stands at around 28 percent of GDP, below the EU average of 42-43 percent.
The country is still dealing with a VAT gap of around 37 percent and Daniel Anghel, tax partner at PwC Romania, suggested that the transition to split VAT system will not have a significant impact on this issue. Instead, he said that Romania’s tax administration agency ANAF should have a more integrated IT infrastructure, which would also allow tax officers to automate certain risks analysis and target companies with a high risk of tax evasion.
Among the recommendations made by FIC in the fiscal field there is the cap of the computation basis for wage contributions to the state budget, fiscal group consolidation at the level of profit and VAT group.
The foreign investors say they would also like to see impact studies in the case of major fiscal changes proposed by the government, as well as implementation deadlines of six months for complex updates in the fiscal area.
On financial services, the private sector is working with state authorities to hike the overall financial literacy of adults in Romania.
Moving on to energy, Stab said that the sector needs around EUR 3 billion worth of investments annually. He underlined the fact that since the start of the privatization wave in Romania’s energy sector, energy companies have put over EUR 22 billion in the sector.
Looking ahead, the Engie Romania mentioned investments in energy efficiency, decentralized production of energy and green mobility as the major trends that will shape the sector in the coming years.
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