Expert-Grup

Analysis of the Changes to Natural Resource Taxes in the Draft Law on Measures to Support Business Activity and Amending Certain Legislative Acts

Politici de creștere economicăTuesday, 21 April 20206196 views
Project:
The use of natural resources: improving the tracking process and transparency

Automatically translated summary. The full text is available in Romanian.

On 16 April 2020 the Ministry of Finance published for consultation a draft law on measures to support business activity. Independent Think Tank “Expert-Grup” analyses its proposed changes to the Tax Code's natural resource taxes, arguing they should not be adopted within a law mainly devoted to mitigating the effects of COVID-19.

The draft cuts the number of natural resource taxes from seven to three, including geological prospecting and exploration taxes and the standing timber tax, without justification. The authors warn this could enable monopolisation of the mining sector, since contracts are largely allocated arbitrarily and the law sets no time limits. Such decisions belong to the Ministry of Agriculture, Regional Development and Environment, not the Ministry of Finance.

Changing the tax base for mineral extraction from cost to volume is considered justified and would raise revenue about 1.8 times. Merging the two underground space taxes (3% of construction value and 0.2% quarterly of book value) adds almost nothing, and specifying second-level local budgets is merely editorial. The authors recommend removing the natural resource provisions and preparing a separate draft law, led by the Ministry of Agriculture, with full consultation.

View the original in Romanian