|  2016-12-22

Romania’s competitiveness is central to the country’s priorities

In terms of growth, the highlights of the year were given by the financial services and energy and resources sectors.

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EY Romania




1. As Romania is going through another economic cycle, in the expansion phase, how has this evolution been captured by EY Romania in 2016, in terms of business growth? How was the increase compared to the group dynamics and what were the reasons?

EY Romania’s revenue has grown by 15% in the last fiscal year, while, at a global level, EY’s revenues were up by 9%. The leading market growth over the past five years is the result of the continuous investments in our people and in innovating our services, which serve both local and international clients.


2. EY Romania’s services include assurance services, business consultancy, transaction advisory services, tax and law consulting. Which of these was the main engine for growth? What are the main economic sectors that have fueled growth in 2016 and why?

All of our service lines have significantly grown this year. The highlights of the year were given by the financial services and energy and resources sectors. There was also a significant upward trend in our consulting services such as: digital consulting, corporate finance, tax controversy, fraud investigation and dispute services.

At a global level, the audit services have increased with almost 5%, business consultancy with 13%, tax consultancy with almost 10% and consultancy in transactions with 14%.

3. How relevant is the low interest environment to the capital structuring decision for companies and how do they benefit from this window of opportunity?

Low interest rate environment as a singular event may not increase access to finance as this is dependent first on the credit merits of a company and/ or of a project. Low interest rate however stimulates other type of financing to pick up like acquisition finance, namely financial investors starting now to complement equity with debt for their acquisitions. Moreover, the low interest rate environment favors a shift from intercompany funding towards market funding, hence freeing up liquidity at group level that can be used for alternative higher yield investments.

4. At this moment in time, what are your hopes, as well as your worries regarding the fiscal developments?

The predictability and the transparency of the taxation system in Romania are as important as ever. In the last 10 years, good progress has been made in this direction – the number of adjustments and amendments of the tax legislation has decreased from year to year. The hope is that this number will go further down in the next years and that any changes will be announced with more time in advance, so that taxpayers may adjust their expectations, business models and plans in due time. One vital factor in this respect is the critically important reform of the National Agency for Fiscal Administration, financed by the World Bank. The significant gains in tax collection efficiency expected of such a reform (and recorded in other countries with similar evolution) could make an important improvement to the state of public finances and actually reduce the need for periodical tweaking of the taxation rates, rules, procedures.

Concerns regarding the fiscal developments are usually strongly correlated to the fundamentals of the Romanian economy, its strengths and weaknesses (like reliance on consumption), the nature and sustainability of the current GDP growth, the increased volatility in our region and the world at large. Any negative macroeconomic development may translate in the need for higher taxes with all the adverse consequences this frequently entails for businesses, individual taxpayers, consumption and investments.


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