Josef Goschy claims the “Specific Tax Law in Tourism and Public Catering” is discriminatory and protectionist
Josef Goschy claims the “Specific Tax Law in Tourism and Public Catering” is discriminatory and protectionist
Businessman Josef Goschy, owner of the Unita Turism Holding hotel chain, sent an open letter to President Klaus Iohannis on July 6, expressing concern regarding the Law on specific tax in tourism and public catering, which was voted on in Parliament and is currently at the presidency for promulgation. If this law is promulgated as voted by Parliament, Goschy says, it will be a law with a pronounced discriminatory and protectionist character.
The law does not take into account investors who have contracted loans for tourism investments. These are discriminated against compared to investors who had funding sources other than banks, through the imposition of a tax on a hypothetical profit that is not reflected in the financial statements. Thus, an investor with bank loans, even if they have a negative financial result until the loans are paid off, will pay a tax that they will have no means to support.
In addition, Josef Goschy further states in the letter addressed to the president, if the law is promulgated as formulated, it will lead to a contraction of the credit market in tourism, a decrease in price competitiveness in tourism compared to our neighbors, and will discourage investments, which are already quite low in tourism, because, ultimately, there are very few potential investors with their own capital who do not turn to banks.
He does not claim that the specific tax law is not beneficial for the Romanian economy, but believes that, probably due to negligence, the category of investors who resort to loans was overlooked.
Josef Goschy says that in his endeavor he is also supported by the Continental hotel chain. However, he is not supported by the strongest federation of hoteliers, FPTR, according to which the state will earn three times more after the application of this tax.
Mohammad Murad, president of FPTR and one of the largest hoteliers in Romania, stated that through the new tax, the state primarily gains, but bureaucracy and pressures on the hotel industry are also eliminated, and the industry self-educates in its relationship with the state. In addition, a fair relationship is created between hoteliers, with equal conditions for all.
After the new tax is implemented, Murad believes that tax audits of hoteliers will become less frequent. It has often been said in the market that large international chain hotels, full of tourists and conferences, declare losses or derisory gains year after year to pay as little corporate tax as possible.
The specific tax is a fixed amount that companies in the tourism and public catering sectors must pay regardless of their actual profit, calculated based on variables such as surface area or number of seats.
Why does Josef Goschy oppose the new tax law?
Goschy argues the law is discriminatory because it forces investors with bank loans to pay taxes on hypothetical profits even if they are currently recording financial losses due to debt servicing.
What are the benefits of the specific tax according to FPTR?
The Federation of Romanian Tourism Employers (FPTR) believes the tax will increase state revenue, reduce bureaucracy, and eliminate unfair competition from large entities that previously avoided taxes by reporting losses.
