ACUE warns of the turnover tax for energy companies hit

The Federation of Associations of Energy Utility Companies (ACUE) expresses its deep concerns following the latest political statements stigmatizing energy companies and the associated rumours about the introduction of a tax on turnover.

Would these information ‘on press sources’ materialize, the consequences would be devastating not only for the energy sector but also for the whole Romanian economy and for Romanian citizens. Also, numerous bankruptcies are to be expected and virtually no company would be in a position to still assume the role of supplier of last resort.

Since the supply of energy is an activity based on thin margins, a tax on turnover would therefore have the following consequences:

• Energy suppliers and traders would be at risk of running into illiquidity, which would force them to stop selling electricity, gas and heat. This, in turn, will generate significant energy supply security issues, especially during winter, that can generate a national security risk.
• The investment capacity of energy companies would be severely affected and investors would have no other choice than to stop their investment activity, though there is a wide consensus that the ongoing modernization of the energy system and the development of new capacities and resources will require many billions of euros of new investments.
• Taken into account the strategic importance of the energy sector and its weight in the Romanian Stock Exchange Market, the introduction of such turnover tax would have very severe consequences on share prices and create wide-reaching collateral damage on listed Romanian companies, on stock exchange market, but also on tens of thousands of Romanians that invested in the shares of these companies.
• The signal sent to the investment community would be disastrous that the perception of Romania abroad will be lastingly damaged.

ACUE underlines that its members are good tax payers, that they contributed together with around 1 billion euro/year in the last few years to the State budget, and that they follow Romanian legislations and rules.

ACUE appeals to the responsibility of political leaders and requests proper consultations as well as a detailed impact assessment before any major decision affecting the energy sector and Romania’s economy is taken.

 

Source: ACUE Press Release