Constantin Dumitriu, ACDBR: "The fiscal measures taken by the Government will contribute to the increase of insolvencies in traditional trade"

The fiscal measures taken last year by the Government will contribute in 2024 to the increase in insolvencies among companies active in traditional trade and distribution firms, Constantin Dumitriu, vice-president of the Association of Romanian Goods Distribution Companies (ACDBR), told us.

Constantin Dumitriu stated: "The situation regarding insolvencies within distribution companies and those in retail and wholesale trade will worsen due to the new fiscal measures imposed last year by the Government. For example, the minimum turnover tax for companies whose annual turnover exceeds 50 million euros. Many of the distribution and traditional retail companies, those that sell cigarettes for example, have margins between 0.47% and 1.5%, are at risk of insolvency in 2024 only from the implementation of the minimum turnover tax measure . Then we talk about the increase in costs for small distribution companies, on top of which was added the capping of the commercial mark-up to a maximum of 5% throughout the distribution chain for basic foods, which cumulatively led to financial problems for those companies. With a commercial markup capped at 5% throughout the distribution chain, there is no way you can cover all distribution expenses. If we add to this the decrease in purchasing power and the fact that small stores, those in the traditional trade, sell less and less and become insolvent, we have the explanation for the increase in insolvencies within the distribution companies".

The vice-president of ACDBR believes that in order to stop this trend of increasing the number of insolvencies among traditional trade companies in recent years, all fiscal measures taken last year by the Government against SMEs should be removed.

Mr. Dumitriu specified: "We are talking about capping the commercial addition, about the taxation of micro-enterprises and about the minimum tax on turnover. We have to let the market be free, to create competitiveness and give a chance to all companies".