PRESS RELEASE: SOLIDARITY CANNOT ONLY COME FROM HONEST ENTREPRENEURS

Given the information that has appeared in the public space regarding the measures planned to be taken by the new government to solve the budget crisis and aimed at introducing new taxes and duties for the business environment and increasing the existing ones, IMM ROMÂNIA, the nationally representative employers' confederation, draws the attention of the future government to the following issues:

1. private entrepreneurs and employees cannot be asked to bear the budget deficit alone, while the central public administration remains stuck in the same organizational mode;
2. solidarity cannot be required from the private sector - employees and employers - but this must not be underpinned by public administration reform;
3. Raising taxes and introducing new taxes should be the last measure any government should resort to, after cutting public spending, reforming the administration, and making efficient use of public resources.

SME ROMANIA points out that introducing new taxes and charges for the business environment and the expansion of existing ones will have the following effects:

• 1. lower budget receipts and lower economic activity or even the closure of businesses due to the inability to pay taxes. It should be recalled that the Government had expected an increase of 8 billion lei in revenues to the budget when introducing the additional tax of 1% for companies with a turnover of more than 50 million euro/year, but in reality only 1.6 billion lei were collected; 
• 2. loss of competitiveness of Romanian companies, SMEs in particular, by increasing prices as a result of passing on the additional costs generated by tax policy to final products/services;
• 3. falling purchasing power of businesses and consumers;
• 4. rising inflation;
• 5. a fall in consumption and thus in domestic production;
• 6. rising unemployment as a result of redundancies that employers will have to make in the context of closure or downsizing.

The requests of IMM ROMANIA in this context are:

• reorganizing ANAF in order to better collect current taxes and revenues;
• taking immediate action to recover uncollected VAT, which in Romania amounts to 7 billion euro/year;
• combating unfair competition generated by the gray or undeclared economy, an issue constantly raised by entrepreneurs in White Charter for SMEs in Romania in recent years;
• implementing national programs to shift the economy from a consumption- and import-led growth to a production- and export-led growth.

ACHIEVING CENTRAL PUBLIC ADMINISTRATION REFORM - ESSENTIAL CONDITION FOR CUTTING BUDGET SPENDING

An essential condition for reducing budget spending is to achieve an immediate reform of the central public administration within 2-3 months maximum, which falls within the exclusive competence of the Government.

 We draw attention to the excesses in the organization of central public administration in the territories.

The deconcentrated public services of the ministries and public institutions organized at county level of the central public administration are unsustainable in number and do not justify their existence in such a large number.

No. crt.	County/Municipality Bucharest	Number[1]  deconcentrated public services of ministries and public institutions in/under the coordination/subordination of central public administration authorities organized at county level
1	Alba	72
2	Arad	39
3	Arges	32
4	Bacau	Not mentioned
5	Bihor	54
6	Bistrita-Nasaud	71
7	Botosani	49
8	Brasov	Not mentioned
9	Braila	39
10	Bucharest	32
11	Buzau	Not mentioned
12	Caras-Severin	45
13	Calarasi	40
14	Cluj	11
15	Constanta	11
16	Covasna	10
17	Dambovita	35
18	Dolj	10
19	Galati	33
20	Giurgiu	34
21	Gorj	13
22	Harghita	53
23	Hunedoara	10
24	Ialomita	11
25	Iasi	54
26	Ilfov	Not mentioned
27	Maramures	Not mentioned
28	Mehedinti	52
28	Mures	24
30	Neamt	29
31	Olt	27
32	Prahova	Not mentioned
33	Satu-Mare	11
34	Salaj	28
35	Sibiu	9
36	Suceava	49
37	Teleorman	29
38	Timis	2
39	Tulcea	44
40	Vaslui	43
41	Valcea	11
42	Vrancea	36
	TOTAL	1.152 (without the 6 counties that do not present the situation)

On average there are 32 deconcentrated public services of ministries and central public institutions organized at county level^[2] of the central public administration, although in Bucharest some ministries have deconcentrated institutions in each sector, and some central institutions have regional structures, the final number being thus higher.

Many of these institutions can be organized at regional level, with county offices without legal personality, to make better use of budget funds and reduce administration costs. 

EXAMPLES OF ORGANIZATION OF MINISTRIES AT COUNTY LEVEL

The ministries have their own structures in the counties, which could be organized under one single structure, given that they are under the coordination of the same central institution.

The Ministry of Agriculture has up to 8 institutions in each county;

• County Department of Agriculture;
• Office of Pedological and Agrochemical Studies;
• Territorial Inspectorate for Seed and Planting Material Quality;
• Territorial Branch of Land Improvement;
• Rural Investment Financing Office;
• Agency for Payments and Intervention for Agriculture;
• County Livestock Office;
• Phytosanitary Office.

 The Ministry of Labor has at least 4 institutions in each county:

• County Pension House;
• Territorial Labor Inspectorate;
• County Employment Agency;
• County Agency for Payments and Social Inspection.

Ministry of Environment has on average 5 institutions in each county :

• Environmental Protection Agency;
• County Commissioner of the National Environmental Guard;
• Water Management System;
• Forestry Directorate;
• Water Basin Administration (there may be several in the same county).

IMM ROMÂNIA calls on the Government to reform all deconcentrated institutions and to reduce budget spending on staff and their administration:

1. in each county a central institution should have a single deconcentrated institution, headed by a general director, with deputy directors for each field.
2.  The staff structure needs to be reorganized, with a single structure for support services (legal, financial-accounting, human resources, administrative, etc.).
3. where possible all these deconcentrated structures should operate in a single building, it is not necessary for all services to have a separate building, with the related maintenance costs (security, lighting, cleaning, administration, administration, vehicle fleet).

          The reorganization of deconcentrated institutions must also be followed by a reassessment of their competences in order to avoid duplication/overlap:

• in the field of public food, the tasks of the public health directorates overlap with those of the sanitary-veterinary directorates and consumer protection offices;
• in the field of landfilling, the local police overlap with the environmental police.

IMM ROMÂNIA believes that these measures can be taken without causing problems in the functioning of public services, thus realizing savings to public budgets.

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^[1]Source: prefecture mai.gov.ro/services-deconcentrated-services/

^[2] Calculated as follows: 1152/36 UAT (without the 6 counties that do not present the situation)= 32