Bringing forward the timetable for the elimination of tax facilities for the IT industry, starting January 2025, is a deeply negative signal towards a strategic sector of the Romanian economy, treated superficially.
Recall that the elimination of tax facilities for the IT industry, as part of the reforms envisaged by the National Recovery and Resilience Plan (NRRP), was scheduled for 2028. In November 2023, the facility was amputated with implementation in just a few days, destabilizing the industry. Bringing forward this timetable, through a measure taken once again in an untimely manner, jeopardizes the stability of one of the best performing economic sectors in Romania and fuels the climate of uncertainty for companies, seriously affecting strategic planning and investor confidence. According to the ANIS study, the elimination of the tax facility will have the effect of reducing the competitiveness of the industry on the global market, by increasing the cost of labor, as well as further reducing the number of jobs, already down by about 10,000 in 2023.
ANIS warns that such measures risk isolating Romania on the global technology scene by discouraging investments and companies' intentions for the Romanian market, and jeopardize efforts to transform the economy into a digital and competitive one.
"Once again, the Government is ignoring tax predictability legislation and any dialog with the businesses and entrepreneurs that keep the national economy on its feet, creating jobs and paying taxes. Eliminating the facility in this context may have a severe negative impact not only on the industry, through massive job cuts, the withdrawal of international companies or the redirection of investments to other countries, but also destabilize the economy as a whole, at a critical moment for digitalization and re-technologization, which are strictly necessary to maintain the competitiveness of Romanian companies," said Edward Crețescu, president of ANIS.
The IT sector has demonstrated an essential role in the resilience of the national economy, including in times of crisis. In the last five years alone, the industry's export surplus has been over €20 billion. The sector's direct contribution to GDP is around 8%, but it contributes through indirect and induced effects more than 14% to GDP. The spill-over effect on the labor market is also around 15% of the total number of employees in the economy*.
Major tax changes that brutally influence the dynamics of industry risk undermining Romania's economic progress and deeply affect the business climate.
ANIS strongly call on the Government to:
- Return to the discussion table with the private sector, respecting the commitments made in the Government Program for a real partnership with the business environment, in order to identify balanced solutions to reduce the budget deficit.
- Reconsider the decision to accelerate the elimination of tax breaks for the IT industry and return to a predictable timetable, in line with the legal framework in force, allowing companies to gradually adapt to the new tax conditions.
- Start a real dialogue with the IT industry in order to identify solutions to support competitiveness and capitalize on the potential of this sector to contribute to the digitalization of the Romanian economy and to economic growth as a whole.
