In search of solutions to stabilize the budget, the Government has recently circulated proposals to increase taxation in Romania. The National Association of Romanian Travel Agencies (ANAT) takes a stand against the recent proposals of some representatives of the Romanian Government to eliminate holiday vouchers for budgetary employees and to increase taxes for the tourism industry.
In the context of discussions regarding the development of vouchers and private sector employees, these measures would have a major negative impact on tourism and the national economy, with the potential to push the country into recession.
The government is considering eliminating holiday vouchers
Thus, Romania would risk losing a valuable opportunity. The government would blow up the potential of Romanian tourism by canceling holiday vouchers for public sector employees, while other private sector employees could benefit from these facilities.
The limiting decision would threaten both the equity and the development of tourism in the country. Vacation vouchers represent an important facility for all employees, regardless of whether they are budgetary or private, as well as a breath of fresh air for the industry and have had a considerable positive impact on tourism in Romania to date.
They caused a doubling of the number of classified units as well as the obvious increase in investments in the accommodation sector. The removal of this facility will affect the survival and development of accommodation structures, causing significant damage to the industry.
"ANAT was surprised to learn of the Romanian Government's intention to cancel the holiday vouchers granted to budget workers, given that they are currently discussing the granting of vouchers to employees of private companies. Also, excessive taxation would be a huge obstacle to the growth of tourism. The intention to increase the VAT on hotels and restaurants to 19% will lead to a minimum 10% increase in the costs of tourist services in Romania, but especially to social problems and the deepening of the budget deficit.
Worse, after the tax on dividends increased since the beginning of the year, from 5 to 8%, the increase to 10% is under consideration. Why doesn't the Romanian Government think seriously about reducing budget expenditures, and sees the increase in taxes as the first solution? In an already difficult period for the industry, such a measure could reduce the tourist attractiveness of our country and decrease the number of tourists", declares Alin Burcea, first vice-president of ANAT.
ANAT draws attention to the fact that the tourism sector represents an absolutely necessary investment for the country's economy
The importance of an overall vision is essential, and ANAT draws attention to the fact that the tourism sector represents an absolutely necessary investment for the country's economy and for Romania's image in the world. The governors should adopt smart and effective measures, which promote the increase of taxation in tourism, and the holiday vouchers should remain a solution to stimulate this field.
"ANAT joins economic specialists and employers who sound a serious alarm about the serious negative impact of these measures on the economy. The second VAT increase, in a short time, in tourism, would lead to price increases in the chain. This measure would take the economy into the subsistence gray zone and accelerate the downward spiral of consumption.
In all surrounding countries, tourism has a reduced VAT rate. Moreover, tourism, so severely affected by the pandemic and the proximity of the war, was compensated much less in Romania than in the rest of Europe. The Horeca 2 measure announced as certain and included in a GEO last year, did not materialize anymore, and tourism companies, decapitalized and without qualified personnel, were left to manage as they can. The Romanian incoming is still half compared to 2019, recovering the hardest", emphasizes Adrian Voican, vice-president of ANAT and vice-president of the Romanian Tourism Consultative Council.
Investments in tourism are discouraged by new tax measures
Investments in tourism, encouraged by previous policies, by the stability of holiday vouchers for a minimum of 5 years, are now endangered by the circulation of options that would overtax or even stop their granting.
Even if these measures will not be adopted in reality, in the end, discussing them in the public space blows away the haze of confidence, stability and predictability in the economy. In the conditions of an inflationary crisis that has spread to Romania, the measures must ease the tax burden on taxpayers, so that they can accelerate the economy.
These measures of overtaxation would bring the national economy to its knees and increase the number of companies going bankrupt and the unemployed, in the conditions of an obviously decreasing demand, caused by the lack of purchasing power. It would also permanently remove us from the international tourism map and deepen the already existing handicap against competing destinations.
ANAT urges the governors to reconsider these restrictive fiscal proposals, to think in perspective, in the medium and long term, and to see tourism as a strategic investment for Romania's economy. Coherent measures and effective support are needed for the development of the tourism industry, so that it can continue to contribute significantly to the state budget and represent a source of pride, a financial plus as well as an image for the entire country.