INTERVIEW. “Why do we cut the costs, to get rid of bankruptcy? So little did it mean the hope of a nation?”. How the new fiscal measures sees one of the most influential investors on the capital market in Romania

Romania needs large, publicly made projects, with measurable effects, with quarterly targets, monthly reporting meetings, video recorded and available to the public in total transparency, says, in a discussion with Hotnews, Andrei Siminel, one of the most influential entrepreneurs and investors in the Romanian capital.

Andrei Siminel is known as general director and representative for Romania of the American investment fund New Century Holdings (NCH).

For over 25 years, he has been conducting and managing significant portfolios of investment funds (Broadhurst, Lindsell Enterprises), with investments of hundreds of millions of euros in Romania, both in listed and private companies, from areas such as industry, financial, real estate, agribusiness and media.

– Romania has adopted a pretty hard fiscal package, which includes tax increases, but also the reform of the state apparatus. How do you “read” this package as an investor? Will the economy rectify in the end?
– The current approach, respectively the increase of taxes and the cost of costs, is natural, but without merits. Maybe that's why it's hard to implement. If, however, it had been completed by adding country plans, then the motivation would gain other values. And we have multiple examples in this regard.

For example: in the 1980s we suffered from hunger, but the communist society was promoted to us; In the 1990s we had strikes, bankruptcy, but it was worth suffering for capitalist hope; In the 2000s I was working for integration in the EU; In 2010 we hoped for wages as in the West. China has “Belt and Road Initiative”, the US comes with “Make America Great Again”.

And why should we cut the costs? – To get rid of bankruptcy? Do you mean so little did the hope of a nation mean? I think the Georgescu phenomenon taught us that a big project gathers huge energies only by enunciation, even if the resolutions are wrong!

Total transparency

One solution in this regard is for the Government to stand in the port-standing system of country projects, proposed and implemented at the level of each direction in each ministry. Public projects, low cost projects, measurable effects, quarterly targets, everything displayed on the Internet, monthly reporting meetings, video recorded and available to the public – total transparency.

In a few months it will be clear what heads of institutions are capable, which institutions are worth supporting. But the most important aspect is that the approach of the type “to be better” will be replaced, “we pretend to work”, “let's cut out” – with projects.

Another standard of value that could change Romania's face. “A thousand projects. Another Romania” – could be the project of Romania.

“The money should not be charged, as they” scare “and run”

– Do you say that, as a result of increasing taxation, the money will move? Detail, please. Were there any moves in the case of previous VAT growths (when he climbed to 24%)?
– A factory, a workshop, a newspaper, a gas station, etc. cannot move to another country; VAT can close some of these operations, but no one will move them. But the money moves instantly; 5 countries in 5 days! They move where they are “good”. That is why the money should not be charged, as they “scare” and run; Money is like water – they run out where they are fine.

– you have designed a scenario in which the money moves from Romania to platforms difficult to control fiscal; What data or observations do this analysis support?
– Aggressive advertisements made by Etoro, Trading 212, Saxo, etc.; If they did not receive customers, they would not advertise for years. But also the profile groups that intensely promote such alternatives say this, as well -known acquaintances, customers, people who discuss investments on Saturday.

Trading platforms that do not report and cannot be controlled

– If the money moves on trading platforms, who loses and who wins?
– If the money moves, for example, to Trading 212, then it earns Trading 212 and the one that moves its money to an area with undeclared taxes (practically zero). There are hundreds of such platforms that do not report and cannot be controlled by local authorities.

Lose the scholarship, lose local banks, lose local brokers. I lose companies that want to finance on the local market, as the money is “departed”. It loses the government that wants to sell minority packages, as it has no one to buy, and those who buy see a small and liquidity without liquidity.

– What would be the effect on stock market transactions?
– He told me an acquaintance, last week, that he was using Tradeville for BVB and Trading 212 for international owners, as he does not declare taxes. I told him that in 4-5 years large international brokers will be forced to report transactions-and then he will wake up with penalties and criminal investigation. It is smarter to take advantage of low taxes in transactions offered by local brokers at BVB and international markets and sleep quietly. A good sleep matters in business!

But if I increase taxes, what will I tell him? I think he will prefer to compensate the insomnia with the winnings.

The government has no specialized people on the capital market

-Another idea/proposal that I retained was the 30% increase in tax (local and foreign brokers). Detail, please.
– The government needs money and has no specialized people on the capital market to understand the specific problem. As a result, they will treat everything “in the pile”.

That is why I proposed a compromise, respectively to increase taxes by 30% (for local brokers, and for international ones). Like any compromise, it does harm, but it does well.

Switzerland of the Balkans

– Why do you consider the examples of Cyprus, Malta, Belgium, Luxembourg, who have zero taxes on the capital market? Can Romania become a Switzerland of the Balkans?
– Bulgaria, Serbia, Hungary, Ukraine and Moldova are admiring at Romania's economy and stability. The effort to convert Romania to Switzerland Balkans deserves a country plan in the field of capital market. The government can attribute this mission to the ASF, of which the BVB must be part. Monthly reports, meetings with all those who can contribute ideas, everything available live on the Internet-a 2-year mandate, with quarterly targets.

In this context makes sense that the state will provide zero taxes for the capital market. The amounts they lose are minor, but the spirit that is won may be a model for the whole economy.

As a result of this project, will Romania become a local Switzerland? It takes many projects to reach such a target, but in this process energies are mobilized and problems are solved.

-What alternatives do you see in increasing the taxation for the state to achieve its budgetary objectives without destabilizing the capital market?
– To add spirit, vision. Georgescu lesson! The “horse industry” is an aberration … but if they come up with proposals to be anchored in reality, then Romanians can do wonders.

“Each direction in each ministry must propose a plan in the direction they are dealing with”

– What, in your opinion, would be the ideal mix of fiscal policies to stimulate the capital market?
– Each direction in each ministry must propose a plan in the direction they are dealing with. Something with low costs but to make a difference. Everything visible, everything displayed, everything assumed.

Ever since the ideas will be proposed, you will see which direction has valuable people who are engaged and know. The monthly evolution will also show who really works, but also who has to leave.

For example, the implementation of the financial data analysis of companies to prevent fiscal fraud (probably there is already a project, but the fact that it becomes assumed, with targets and is visible to the whole country, changes perception).

-How do you see the evolution of the Romanian stock market in the next 2-3 years, in the context of this possible wave of taxation?
– Politicians talk, business people do. But that does not mean that politicians are unprepared and that is why they do not -on the contrary, I think they are very capable people -but who have learned that if they change the rules of the game they attract enemies and lose their support.

That's why they try to make changes in caution, always consulting voters – and that reduces their speed of action. However, the nationalist wave in which we live imposes speed and responsibility and that is why I believe that politicians will adapt and implement low taxes for the capital market, which will prevent the departure of money.