The Impact of COVID-19 Crisis on Fiscal Environment in Romania

The economic and financial crisis generated by COVID-19 has determined a huge pressure on the state, to which is automatically assigned a dual role, with a major importance in relaunching the Romanian economy. The state authorities remains within the role of collecting the budgetary revenues of fiscal nature, necessary to ensure the smooth functioning of health, education, justice, etc. On the other hand, it is absolutely necessary the intervention of the state through measures that support the business environment and individuals in order to overcome the negative effects generated by the lack of liquidity. The intervention on the existing fiscal pressure requires rapid action, applicable as soon as possible, without exceptions and without excessive bureaucracy, with an involvement and collaboration between the state authorities and the business environment, respectively taxpayers, based on honesty, fairness and total transparency. The reduction of fiscal budget revenues (felt today) is indisputable. However, taking into consideration this context, measures as increasing taxation, maintaining the fiscal burden in order to obtain budgetary revenues to cover the existent budgetary expenditures represents only a clear path to the disaster of Romania’s economy. The only viable solution outlined is based on the resettlement of budget expenditures, simultaneously with the temporary waiver of part of the tax revenues in order to restart the activity of companies. The onset of the COVID-19 crisis means a total ‘restart’ of the business environment. On the other hand, it can also be an opportunity for the state authorities to intervene in the continuity of the activity of those companies that have shown ‘inappropriate tax behavior’ for long periods of time.