Second government plan to counter the crisisPublish date: 14-01-2009
Establishing two funds worth €1 billion each, one to guarantee up to 50 percent of loans to continue investments, and the other for the crisis, to support small and medium-sized enterprises (SME), to lower the Cash Reserve Ratio (CRR) for working capital and investment loans, and a two-year ban on foreclosures for individual mortgages are the main measures being considered by the Finance Ministry to counter the crisis.
The only thing remaining in the Finance Ministry draft from the old anti-crisis plan by the former Government is tax exemptions for reinvested profit, aimed at increasing competitiveness. Furthermore, among the 23 steps to counter the crisis, the new plan includes the maintaining of the 16 percent flat tax. For this plan, the new Government decided to establish working groups to include employers and trade unions, who are expected to propose their conclusions by January 17. "Measures proposed by the current government, especially those concerning unblocking lending, could help the business environment escape paralysis, but only if these are applied as soon as possible," the President of the Association of Businesspeople in Romania (AOAR), Florin Pogonaru, said.
However, the Managing Partner of Tax House consulting company, Angela Rosca, said that the tax exemption is indeed a facility to revive investments, but that this will not end the deadlock brought about by the financial crisis, as companies lack funds for investments, and most of them will not post profits.
Other consultants criticized the ministry for cutting some measures included in the former plan. "Eliminating the 5 percent fiscal prize [tax reduction] for the timely payment of taxes will disadvantage companies that need such a measure during this crisis," according to the Managing Partner of Mazars advisory company, Gabriel Sincu.
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