FPSC  organized a press conference entitled "Tax incentives for construction workers - a political decision for continuing investments in Romania or for sending Romanian workforce to foreign construction sites?", which successfully drew attention to the risks that a possible reduction/cancellation of tax incentives would bring to the investment market.

The press conference was led by Mr. Cristian Romeo Erbașu, President of FPSC, Mr. Valentin Petrescu, First Vice President, and Mr. Irinel Tofan, Daniel Pițurlea, Irinel Gheorghe, Vice Presidents of the federation, and Ms. Adriana Iftime - General Manager.

The message from the construction industry was very clear: such measures should not be taken solely based on strict mathematical calculations, but the entire impact of reducing/cancelling incentives should be analyzed in the short and long term.

The immediate impact will be on employees, as their net salaries will decrease, leading them to migrate to Western European countries for more attractive wages.

Whether it's just the health contributions (10% of gross salary) or the complete cancellation of incentives, for an employee with a minimum wage, the difference in hand would be immediately felt, as they would receive 400 lei less per month in the first scenario, and 780 lei less in the case of incentive cancellation, which would quickly empty Romania's construction sites.

Employers cannot cover the differences resulting from such a measure, so many of them will be forced to pay workers "under the table" or reduce their activity. Consequently, the forecasted revenues by fiscal analysts will be contradicted by reality, but it will be too late.

"We cannot only look at numbers," as Mr. President Cristian Romeo Erbașu stated, but we must be aware that "in a short time, things will go very bad in the investment field. (...) If we are not listened to, we, the constructors, will collapse, and ultimately, everyone will collapse. Once harm is done, it's hard to repair it later."

The loss of workforce will lead to blockages in all investment projects and the inability to use the funds allocated through PNRR or other funds.

The argument that PNRR milestones oblige the government to take measures to reduce/cancel tax incentives for construction workers is not supported by written provisions, as the provision regarding this measure should be applied gradually, starting in 2025.

We are in the middle of 2023, halfway through the period of applying the Agreement signed by the Romanian Government, which declared the construction sector a priority, and we are facing another "breach of the contract," as Mr. Valentin Petrescu, First Vice President of FPSC, said during the conference:

"The Agreement signed with the Romanian Government is like a contract and should be valid for 10 years. If we have committed to something, the other party should also commit. We cannot change the rules of the game during the game. It's not fair, and it's not natural."

"There is a false impression at the moment," Mr. Petrescu continued, "that if we were to give up incentives, the budget problem is solved. It's not solved. It's a temporary solution, for one, two, five months, but in the long run, Romania's budget will lose, and fiscal consultants should know this! (...) Romania's budget loses in the long run."

Constructors need predictability. They want to keep their workforce on construction sites. They want fairness and for the government to listen and understand exactly what impact such a measure would have.

Too much is being talked about "constructors' incentives" and almost nothing about "investment stimulation," even though the introduction of fiscal measures led to the revitalization of the construction sector, stopping the free fall it had reached at the end of 2018, and especially to an unexpected investment process after a clear decline. There is also no mention that our sector supported Romania's GDP in the pandemic year of 2020 and that we now have around 450,000 employees, up from 300,000 in 2018, before OUG 114/2018 (Emergency Government Ordinance 114/2018).

In a suggestive way, Mr. President Erbașu stated during the conference: "We are in a paradigm. Metaphorically speaking, we are starving, and we have 10 chickens in the yard, and we are cutting those that lay the most eggs to eat, instead of looking at those that don't lay any - and there are plenty in Romania - or those that lay too few eggs."

Negotiations continued at the government on the same day, but unfortunately, we still don't have a firm answer showing that the sector's issues have been understood and that without constructors, PNRR investments are just "beautiful dreams."