The opinion issued in December by the Legislative Council on Ordinance 114 (which establishes, among other things, the „tax on greed”) contains no less than 23 pages of comments and proposals and asks for amending the text.
In addition, the Council demonstrates the extent of the changes made by the Ordinance to 25 other normative acts in force simply by publishing a list of amendments to these 25 laws, a list of 200 pages in A4 format.
Ordinance 114 initiators ignored most of the suggestions made by the Council.
The most important observations, in the following:
Where’s the emergency?
The Legislative Council draws Government’s attention that „in accordance with Article 115, paragraph 4 of the Constitution and taking into account Constitutional Court decisions in the matter, legal and factual elements of the extraordinary situation that cannot be postponed” should have been presented in the explanatory memoranda of the ordinance.
Instead, after reading the documents submitted by SGG, the Legislative Council writes:
- „The urgency of the regulation is uncertain, given some deadlines contained in the draft that apply at least 30 days after the entry into force of this draft”
- „Regarding the complexity and numerous legal hypotheses envisaged, they might affect not only the coherence of the new proposed legislation but also the normative acts concerned, the use of repeated derogations from the framework legislation in various fields, and the extension of some deadlines, by annulling the legal effects of the basic rule, and at the same time represent real reasons for reconsidering and repositioning the entire draft.”
Over taxation of state-owned companies: creates bases of a centralized economy
Regarding the decision to take, in the form of dividends or payments to the budget, 35% of the reserves of state-owned or autonomous companies that were not committed on 31 December 2018, the Legislative Council considers:
- „The envisaged legislative solution is likely to prejudice the constitutional freedom of exercising an economic activity, by imposing a will on shareholders that is extraneous to the company’s interest, contrary to art. 135 of the Constitution”.
- „The bases of a centralized economy are created, as it represents a simple form of collecting budgetary resources, which violates the principles of the market economy by imposing on the majority state-owned companies the distribution of the profit to the state and ignoring the interests of the minority shareholders„
Why have you have repealed fiscal responsibility – it is part of the European commitments
Ordinance 114 proposes that „the 2019 draft budget and the fiscal-budgetary strategy for 2019-2021 should be exempted from the obligation to respect the principles of fiscal responsibility (established by law, editor’s note) and the targets or thresholds set for fiscal rules or any other of its provision”.
This provision is contrary to the rules and the Council reminds the Government about the obligations assumed under the Treaty on the functioning of the EU and the annex protocol on the reference values for the public deficit and public debt which should be respected. The Council also warns that Romania could be sanctioned by the European Commission.
Prorogation after prorogation, so what’s the point of the law?
The Legislative Council notes the decision to prolong by 31 December 2021 the terms of Ordinance 6/2013 (establishing special measures for the taxation on the exploitation of natural resources other than natural gas), terms that have been consecutively extended by another 4 times.
„… could be contrary to the considerations expressed by CCR in Decision 1278/2010 according to which repeated prorogation of the entry into force of the provisions is not desirable, as it can ultimately defeat the very essence of the law, which is inadmissible,” warns the Legislative Council.
