The unique income tax (16%) and the standard VAT rate (19%) are two of the main competitive advantages of the Romanian fiscal system. But the frequent law changes, insufficient regulations and the administrative apparatus' inefficiency are instability factors in the development of the Romanian business environment, according to the Deloitte Report "Fiscal Romania - the radiography of an incomplete reform".

The main Deloitte Report conclusions:

• The business environment representatives request the authorities a fiscal strategy on a medium and long term (34%).

• The lack of timing for administrative procedures attracts additional costs for companies, which solicit clear procedure for fiscal administration (22%).

• The limitation of social contributions is solicited by a quart of the business people.

• The VAT represents the most problematic aspect in the relationship with the authorities (35%).

• The business people note the feeble professional education of the fiscal inspectors, their lack of transparency and the uncooperative attitude.

Rodica Segarceanu, Deloitte Tax partner:

• Any tax increase has a negative impact on the business environment. It could be a theme addressing the increase of social contributions.

• There are no clear procedures of organising a fiscal check in Romania. Authorities do not focus on the contracts' substance, but on their form. The want to see the way the bill is made and not what has been billed.

• Currently, absolving the reinvested profit from tax works more as a delay, rather than release.

• The fiscal authorities do not know the industry where they charge fines.

• There is a need for fiscal Tribunals.

Pieter Wessel, Deloitte Tax partner and VAT team coordinator:

• If the VAT is increased, the economy suffers. The prices will go up, killing the inner demand.

• From the budget's point of view, the VAT will lead to an income increase for sure. This is usually because the consumption is easier to tax than the profit, obviously. That’s why I cannot understand why the Government, lacking money, thinks of increasing the VAT. But my opinion is that it is a measure viable only for a short term.

George Mucibabici Deloitte Romania president:

• In the US, you get annually a document from the Fisc, showing you, to the last penny, what was your money gathered from taxes and duties spent on. They show you how much does the Police chief earn - the man who arrests you in case you haven't paid your duties - how much was it spent on the gas used by the cars used in the public system and so on. There is a better understanding that in return for the money you give the state, you have certain advantages.

• The system is much better organised. If you earned more and forgot to pay the tax for it, the IRS would immediately knock at your door.

• In Romania we do not know how many people pay taxes for ho many and this generates worries regarding the sums the budget will get. If there were a transparent system which would treat te tax payers equally, probably the collection degree would improve.