Romania needs to comply with the agreed budget deficit with the European Commission, and in order to cover a gap of several tens of billions of lei, the Government has negotiated a package of fiscal measures throughout the summer to ensure economic stability in election years.
Where does the state intend to get this money from? From increased taxes. It’s not just gambling that is targeted, although it is true that in the post-pandemic period, gambling has been facing tax increases. Several industries are affected by the new fiscal measures, from the IT sector to tobacco, alcohol, and luxury products.
The reality is that no matter what arguments any of the targeted industries may present, the state needs those funds and is trying to take them from where it believes it’s easier. Of course, both we and the other industries could come up with economic arguments and show that, in fact, such measures will not bring more money to the state budget, because it’s difficult to withstand when the taxes you have to pay become larger than the profit.
The financial need is so great that our arguments, whether justified and entirely correct, will not matter.
Whether it will be September 1st, October 1st, or January 1st, it is clear that a change in the taxation method will take place.
We will not remain passive. We will speak the truth, we will speak about suffocating a perfectly legal business, about our industry’s contribution to the state budget. We will argue with numbers and present our side of the truth. Will it matter? Probably not, just as the truth of other industries affected by the new measures won’t matter either.
We know that the money the state hopes to collect won’t materialize. We hope they will also understand that our industry yields a profit over 5 times smaller than the taxes we pay. What does that mean? It means there will be a real struggle for survival.
Certainly, we won’t remain passive, but we must be realistic and aware that no matter how much resistance we put up, their acute need to cover the budget gap will outweigh everything else. And this time, it’s not just the gambling industry being targeted for the sake of public opinion; it’s targeted for the same reason as the IT sector – out of an immediate necessity.
We don’t know exactly how this shift in the taxation paradigm will look, but we do know for sure that the industry has endured one increase after another, and it hasn’t been easy.
On the other hand, the situation we find ourselves in has been anticipated for a long time. We are all aware of the economic situation, and we expected that any new fiscal measure would target us as well. How prepared are we for this new wave? It remains to be seen for each of us individually.
It’s certain that we don’t want to contend with unfair competition on top of this new fiscal burden. Why do I say this? Because in times like these, the black market will thrive, and that will suffocate us even more than the taxes.
We will ask the state to, just as it has been able to increase taxes, also get involved and put effort into combating illegal gambling activities. It is primarily the duty of competent authorities to identify and implement measures that lead to the elimination of the black market. The state also has the responsibility to ensure a fair competitive environment for the business sector. More transparency is needed from the authorities that oversee and regulate gambling. We require concrete information, effective communication, and transparency. You cannot suffocate some while allowing others to grow illicitly, outside of any regulation.
There are already signals indicating a sharp increase in the black market, which is why we must also put effort into combating unfair competition. A tax increase is not sustainable at this moment, but an flourishing black market will be equally challenging to sustain.