I look back and remember that 2018 started out tumultuously, with the famous „fiscal revolution.“ I’m thinking of the first months of 2018, when we practically witnessed a real „Balkanisation“ of tax legislation, demonstrated by numerous inadvertencies or legislative gaps, transposed into an unacceptable lack of coherence in the unitary and correlative application of the new tax regulations. Several corrections of the legal framework were required in order for things to slowly fall into place.
Taking this into account, I wonder about the expectations we can have of the Romanian tax system in 2019. Of course, we could dream of a properly structured legislation for holdings, in terms of the fiscal consolidation of profits and losses… or the transposition of recent European jurisprudence within the fiscal code texts, especially when it comes to VAT tax deductions… or a harmonization of the accounting norms and fiscal rules to limit redundancies between them… or defining some clear criteria for fiscally qualifying a transaction as being artificial (with no substance/economic content), with the ability to eliminate subjective or arbitrary interpretations by tax authorities… or, finally, a conceptual regulation of the checks conducted by anti-fraud inspectors… and many, many others, especially in terms of tax procedures…
But if we were to be realistic and not confuse desire with ability, I think we’re better off not expecting anything. We should really want things to stay the way they are, to at least remain stable and predictable, with no new fundamental changes of tax law appearing overnight, as they can be contradictory, inconsistent and insufficiently structured in order to enter the day-to-day fiscal practice. Because I don’t think it’s desirable, for the sake of harmonization and efficiency in fiscal legislation, to end up getting some changes threatening the already fragile stability, which we’ve reached after going through a year of big changes and unrest in terms of tax regulations. And until we see the final version of the law to approve the already famous Emergency Ordinance 79/2017, I don’t think we’re going to be worry-free.
Many times, I’ve felt like the fiscal legislation has gone through pointed, limiting changes that would respond to some immediate needs (either to grow state budget revenues or to satisfy the business environment), but without any measurement of their impact, at least on a medium-term, and without these changes being part of a larger fiscal strategy or vision.
A dispersed series of possible legislative changes – which can be good if looked at individually, but with no correlation to each other or to current law – would make the business environment extremely uncomfortable, as there can be difficulties in the way they are understood and applied. Let’s not forget that a tax system is perceived by taxpayers as being friendly – and implicitly voluntarily accepted – not just when the overall tax burden is low, but also based on the way the system manifests and interacts when it comes into contact with taxpayers. Many times a larger fiscal burden is preferred as long as it’s stable, offers certainty, and isn’t prone to different legal interpretations that can turn the taxpayer into a „victim“ of extra debts.
To conclude, I think we can say we’d be pleased if decision-makers were more reserved and „less creative“ in launching new fiscal legislation changes in the following year, since that’s the only way we can be sure we don’t have any unpleasant surprises.