"The latest sustained efforts of the Government for maintaining a stable low level of tax have contributed to building a positive image of Romania as investments destination. Jones Lang LaSalle points out the risks that could impact on Romania’s image considering investments, generated by the potential increase of the flat tax from the current competitive level of 16% to 22%”, a press release sent to Mediafax shows.

"Romania is compared to the other countries in CEE. A main decision factor for the companies is the taxation. The taxation is evaluated considering the absolute level of the tax, the capacity to repatriate the profits and the fiscal environment predictability. The proposed increase of the flat tax will clearly harm Romania’s competitive position ", Klomp said.

In his opinion, growing taxes without a proper investment strategy is not a wise decision.

"Regarding the real estate market, the office and the industrial sectors will probably be most harmed, as well as their tenants’ business and their future development strategies. The liquidity will also be affected, as the real estate investors monitoring Romania wouldn’t appreciate the unpredictable fiscal environment and could delay their return or entry on the Romanian market. Without a clear sale strategy (exit), the real estate investors cannot reinvest their capital in new projects", Klomp explained.

JLL’s representative also shows that despite the VAT compensatory drop by 2 pct., the tax increase on personal revenues will lead to retail sales, which will affect the local market.  (source: wall-street.ro)