"Increasing the tax on earnings is inopportune and counterproductive"

• The fiscal deficit and the reaction of the capital market

Reporter: Is it clear what the Government is after?

Adrian Tănase: The Government has an obvious problem: the fiscal deficit. Regarding the capital market, we want to contribute to identifying efficient solutions.

Reporter: The BURSA public believes that the deficit is caused by

mismanagement, not by the market or taxpayers.

Adrian Tănase: In the absence of alternatives, the authorities choose the most accessible short-term solutions. Some are easier to implement than others.

• "The discussion about taxing the market is inopportune”

Reporter: Do you claim that taxing the market is the wrong measure?

Adrian Tănase: We are not absolutely for or against it. But the discussion about taxing capital gains is inopportune at this time. The tax base is too small to justify the fuss.

Reporter: How small?

Adrian Tănase: The annual liquidity with local shares is approximately 3 billion euros. Only half is generated by individuals. With a hypothetical profit margin of 10%, we have a tax base of only 150 million euros. If we add the open-end fund market and transactions on foreign markets carried out through brokers registered for tax purposes in Romania, we are still around hundreds of millions with the value of the tax base. Compare this to the dividends distributed by listed companies, where the base is 3 billion euros; there, each additional percentage in tax brings 30 million euros.

• What worked and what can be broken

Adrian Tănase: The tax reduction measure stimulated the market. In 2022, we had 100,000 accounts, now we have almost 250,000, of which 100,000 are active. The success of Hidroelectrica and the recent listings confirm the efficiency of this direction.

Reporter: Then why is there talk of a change?

Adrian Tănase: Out of inertia and without a complete analysis. BVB does not have, for now, the necessary liquidity for these taxes to become relevant. Poland has 300 million euros per day. We have 10-15 million. When we get there, we can reopen the subject.

• Risks for the valuation of state-owned companies

Reporter: What do you propose, specifically?

Adrian Tănase: To maintain the current conditions. The listed state packages are worth 17 billion euros. If you generate fiscal uncertainty and damage the valuation of these assets, you lose much more than you would collect. If the state intends to sell packages of 2 billion euros, just as an example, any 10% correction of the stock market indices could generate losses of 200 million euros only within those deals. If we refer to the valuation of the entire holdings, the loss generated is billions of euros.

• Conclusion: a marginal topic, with major effects

Reporter: Are you saying that the Government is sabotaging its own strategy?

Adrian Tănase: Yes. It is a discussion with an indirect negative impact, which does not bring real benefits. The focus should be on developing market liquidity and effectively capitalizing on state assets. This is not the time to get lost in principled disputes with immaterial effects that may even harm the long-term budgetary interest.

Reporter: Thank you!