This opinion is not an attack on the individual, but an analysis from the point of view of a micro-enterprise owner who has a different opinion from the people who drafted the last “trenuleț” decree, which limited the ownership of one person to one micro-enterprise.

In the afternoon of Friday, since last week, the already known GEO no. 115/2023 introduced numerous fiscal changes. One of the changes is that one person can only own one micro-enterprise. Of course, it should be said that the microenterprise taxation regime is favorable and the tax is a percentage of 1% or 3% of the revenue, depending on the subject of activity and depending on the achievement of the upper limit of revenue of 60,000 euros.

The budget share is generated by the fact that, after some analysis, it was found that there are approximately 400,000 micro-enterprises in Romania with a profit of approximately 5 billion lei. Part of the distribution of these profits, the legislator considered the obligation to pay income tax.

I remind you that due to the legislation of 2022 – another well-known resolution, OG no. 16/2022, a restriction on ownership of micro-enterprises by an individual to 3 companies was introduced.

Now, from the rest, the legislator expects that two-thirds, or maybe more, because indirect property is also limited, would go to pay income tax, with the hope that the state budget will collect more money.

I have at least 3 arguments, according to which in a maximum of 6 months, the legislator will offer us, entrepreneurs, to restore micro-enterprises, and the legislator will be the first interested in the development of this taxation system, the provision of tax benefits.

The first 2 arguments are fiscal in nature, and the 3rd is civil, the coercive power of the state being contrasted with the coercive power of voting.

Argument No. 1: loss of important taxes to the state budget due to termination of tens of thousands of labor contracts.

Let’s make a small simulation: with a minimum gross salary of 3,300 lei, the employee receives a net salary – in hand – worth 2,079 lei, and the state collects taxes in the amount of 1,291 lei. This sum of 1,291 lei was a guarantee for the Romanian state to collect money from each micro-enterprise every month.

The reduction in taxation of micro-enterprise income was due to the obligation to register a full-time employment contract. We will remind, in 2021, since the registration of an employment contract by a micro-enterprise became mandatory, the authorities announced an increase in employment by approximately 150,000 jobs. Since all this was happening in December 2020, it was most likely that those micro-enterprises that did not have employees, but wanted to remain micro-enterprises in 2021, hired.

In practice, the tendency was not to hire external workers, but to own owners of the micro-enterprise, employment contracts were concluded in the name of the employer or in the name of persons related to the owner of the micro-enterprise (husband, wife, father, child, etc.). and the activity continues to be carried out by the founder of the respective company.

The vast majority of these labor contracts are likely to expire in December 2023, and in January 2024 we must ask ourselves whether this rationale is in practice. From my empirical research, this is widespread.

I am very interested, and I will ask the labor inspectorate about the evolution of labor contracts in November and December of the current year compared to January 2024.

In fact, before the collection of the illusory income tax, the state will lose income tax and social contributions. This state-guaranteed sum of 1,291 lei per month per contract is a definite loss of the state budget starting from January 2024.

Let’s assume that only half of the 150,000 jobs will be cut. Our simple math shows us the damage to the state budget in the amount of: 1,291 lei X 75,000 jobs X 12 months = 1,161,900,000 lei.

Argument No. 2 – These beautiful, transparent profits of micro-enterprises will no longer exist. When there is no profit, there is no income tax.

For many years, people in the financial accounting and taxation fields, whether they are tax consultants, financial auditors or accounting experts, have tried to tax these small business owners in the sense that they do not purchase personal items through companies that own That is, to purchase your personal assets from the net income after distribution as dividends, obviously subject to dividend tax.

In this sense, everyone is calm. The state collects its microenterprise income tax and dividend tax, this is a much higher percentage than the income tax, so the dividend tax is 8%, and the microenterprise owner sleeps without risk.

When these micro-enterprises become corporate tax payers, no one will be able to convince these company owners not to buy goods from the company, because the decision rests with the company owner alone.

We all know that a smart watch is necessary in the business of the company in order not to be late with the delivery to the customers. In addition to refrigerators, televisions, furniture, and in some cases clothes, all this is necessary for the activity, because we only have to serve suppliers and customers coffee or mineral water in decent clothes.

Of course, in theory there is an argument that there will be tax audits. There may be such specific actions, but it is impossible to carry out tax audits of tens of thousands of micro-enterprises, and when it comes to court, it will even be possible to prove that the smart watch is useful for business, because the legislator has set the terms for the implementation of the law.

In this way, the illusory future profits of micro-enterprises will be properly adjusted by the costs that were previously borne by the individual and are now borne by the company.

Argument No. 3 – Coercive power of voting.

I have permission from a former college colleague to describe the following situation. This former classmate and good friend believes in the left hand voting doctrine, he has always voted with his left hand. Of course we are good friends and I balanced your voice with the voice on my right. This old friend of mine even held important government positions, including the post of Secretary of State.

For more than ten years, he has become an entrepreneur and has to earn and pay taxes himself. He became, as they say, a philanthropist even without engaging in political activity.

Every time there’s a tax change that also affects my budget, I call him and ask him with some friendly cynicism, “Does he accept that his exes are picking on him?”

I asked him a few days ago and he told me that in the upcoming elections he will vote for the party of Fet Frumos with the leader for the ruble and in the presidential elections with Ileana Kosanzeana, not that he sympathizes with them, but that he no longer wants to vote for the left Of course, I am friends with him and I think to balance this fact in favor of a less right-wing vote. I’m still thinking about voting for less rights. There are 4 rounds of elections per year. Before the parliamentary session, I am waiting for the project to restore micro-enterprises with tax benefits.

We will see this in the draft before the parliamentary elections and in the Fiscal Monitor before the presidential elections.

N.Red: Adrian Benza is a tax consultant and a longtime employee of HotNews.ro