At the beginning of the year, OMV Petrom announced record contributions to the Romanian state budget in 2022, about 20 billion lei, of which 19 billion lei are taxes and fees (labor taxes, VAT, excises, royalties) and 1 billion lei in dividends for the participation of the Romanian states in this company. Direct taxes (VAT and excise duty) make up half of this amount.

BAT Romania also added about 10.5 billion lei to Romania’s state budget in 2022, after it announced last year a total contribution of 24 billion euros over 25 years of operation, while Rompetrol Rafinare also returned about 7 billion to the state budget in 2022 .51 billion lei.

In 2022, the Romanian state achieved tax revenues of 230.5 billion lei. That is, 16.1% of GDP came from tax revenues collected as a result of economic activity carried out in Romania.

Basically, the budget balance is achieved by the state, which is limited (due to its expenses) exclusively by these tax revenues.

However, the level of revenues to the budget in 2022 was doubled, half of the revenues came from other sources: state companies, state institutions, European funds, income from capital, etc. However, this element does not inspire or please at all.

On the contrary, it is terrifying because these revenues are highly variable and highly dependent on economic cycles. The greater the dependence on this type of non-fiscal income, the more procyclical and vulnerable the budget becomes to potential crises. All the more so since many of the permanent expenses in the budget are based on general revenues, and not on tax revenues.

Three private companies (OMV Petrom, BAT Romania, Rompetrol Rafinare), i.e. the largest contributors to the state budget, financed the Romanian state for approximately half of the (excessive) deficit, 1/3 of the Romanian state’s expenses with salaries in the budget sector.

Only three large taxpayers received about 16.5% of the total tax revenues from the Romanian budget in 2022

All 3 companies, which occupy the first 3 places in the list of the largest payers of the state budget, are private companies. The 10 largest tax-paying companies provide about 8-10% of total budget revenues, that is, about 20-25% of annual tax revenues. These large companies cannot afford tax evasion, they pay taxes to the state budget on time.

The entire collection is carried out by these companies exclusively with their own funds.

The state does not move a finger, the state does not spend resources to collect this money. Expect these companies to replenish government accounts on time and in significant amounts.

These large taxpayers play an obvious role as a fiscal stabilizer. In an environment of very tight spending (such as public sector wage costs or pensions) that cannot be easily cut (especially in a recession), it becomes important that the public budget is fed through these revenue channels, a reliable income, with very little deviation from paying taxes on this and with very little costs for collection and control by the state.

The need for such fiscal stabilizers is seen in the way the state counts and increasingly uses state-owned companies to obtain non-tax revenues. Unfortunately, in recent years, the state has increasingly replaced fiscal stabilizers of this type (private) with state-owned companies. This obvious strategy cannot be profitable in the long run, since the revenues generated by both the private and public sectors depend on capital investment, capital that the government does not have and cannot easily borrow due to higher public debt (as a percentage of GDP). but also because of extremely weak steps to increase the country’s rating.

In this context, fiscal policy, whether we like to admit it or not, should give priority and due care to these large private taxpayers who brilliantly fulfill this role of fiscal stabilizer and keep Romania afloat.

Instead of taxing them with all kinds of taxes on “solidarity”, “main”, “unrealized profits”, etc., we would rather try to offer these enterprises the necessary transparency and trust, a serious and honest strategic partnership that will lead to horizontal and vertical development of their business, which could attract other strong global players, could make Romania really attractive for global value chains.

We could see more real foreign investment here, and we could see more development that has a long-term vision behind it, rather than small goals and actions with a short time horizon.

It is clear that Romania needs at least as many large private taxpayers, if not more, to ensure its necessary macro-stability and to be able to embark on a healthier, more reliable and sustainable growth strategy in the face of potential crises. This is the right approach and the only one we have left.

Today, there is a lot of talk about money for education. The only sustainable and healthy source is to attract new large investors to Romania, such as those mentioned above. This can only happen if you remain serious and reliable in honoring your agreements with these very important players. Unfortunately, very little is being done in this direction today. And in another related and no less important direction: the privatization of large state-owned companies (especially energy and gas companies), a topic that also remained sacred for some time. Too long.