Retailers: Minimum turnover tax stops e-commerce investment, switches additional costs to consumers

   The minimum turnover tax (IMCA) reduces companies' ability to invest, hinders competitiveness and puts additional pressure on consumers, two online retailers warned on Thursday."The Minimum Turnover Tax (IMCA), implemented since the beginning of 2024, generates consequences that contradict the stated objectives, namely increasing government receipts and ensuring a minimum contribution from large companies, regardless of the reported profit level. Instead, it reduces companies' ability to invest, limits competitiveness and puts additional pressure on consumers. In e-commerce, where net profit is often less than 1%, a uniformly applied turnover tax directly pushes loss-making companies and blocks development projects that are essential for efficiency and digitalisation. Moreover, in the first six months of application, the collected government revenue was nearing just RON 1.2 billion, well below the RON 6 billion estimated by the government, according to representative organisations of the business community (Concordia, AmCham, FIC). The difference confirms the inefficiency of the mechanism and reveals the disproportionate impact on sectors with low profitability, such as e-commerce. In such fields, investment in infrastructure and services is essential for growth, but they do not immediately translate into accounting profit, which makes the turnover tax penalise precisely the companies that constantly reinvest," according to evomag and Vexio execs.For Romanian and online commerce companies, the impact is amplified by the effect on the distribution chains. Thus, the same 1% tax is applied on importers, distributors and retailers, which means a cumulative burden of about 3%, and compared with an overall margin of no more than 10%, with all costs, this additional charge pushes the entire chain into loss and threatens the sustainability of the industry."An online retailer cannot afford to operate without permanent investment in logistics, technology and international expansion. At evomag, such investments exceed EUR 500,000 annually. A tax levied directly on turnover, regardless of profit, hinders the ability to reinvest and forces us to rethink strategic plans. Instead of accelerating long-term development, we are also constrained to adjust quarterly budgets for on an unpredictable fiscal framework," according to Mihai Patrascu, CEO of evomag.In their turn, Vexio representatives emphasise that the effects are transmitted further, throughout the chain of partners."An eCommerce business means hundreds of contracts with transport, logistics, IT services, marketing and technical support providers. The reduction in investments directly affects these companies, many of them Romanian SMEs that depend on the volumes generated by online retail. In addition, an unstable tax framework sends a negative signal to investors and reduces the attractiveness of the Romanian market in regional competition. And at a time when local companies are trying to compete with online stores that do not have a legal presence in Romania, so they are not subject to the same rules, such a tax makes fair competition impossible," says Costinel Ilie, managing partner of Vexio.At the same time, attention is drawn to the differences in tax treatment between retailers with a turnover of less than EUR 50 million and those exceeding this threshold."While large players are obliged to pay the turnover tax, direct competitors, but smaller in size, are not subject to the same rules, although they operate on the same market segments. This discrepancy creates a form of unfair competition, which disadvantages Romanian companies that have invested in development and scaling, penalising precisely the actors that contribute the most to the consolidation of the local e-commerce market. The effects are also visible at the level of consumers. E-commerce has democratised access to technology in Romania, giving millions of customers the opportunity to quickly and conveniently purchase products necessary for work, education or daily life. The artificial increase in costs determined by IMCA risks slowing down this process and accentuating the already existing gaps between urban and rural areas, where access to digital products remains limited," the release reads.The representatives of the two companies are of the opinion that, for the e-commerce sector, the effects of IMCA are clear: deferred investments, reduced competitiveness and pressure transferred to customers.evomag is a leading e-commerce company in Romania, having attracted an investment of EUR 2 million from Catalyst Romania, one of the most important technology-focused venture capital firms in Romania, in an effort to sustain the company's accelerated development.Founded in 2009, Vexio specialises in the marketing of IT&C products, PC components, electronics and home appliances, while also offering customised technical consulting services for customers, based on fast deliveries, competitive prices and constant support.