EXCLUSIVE Economist Stas Madan welcomes the entrepreneurial initiative of Minister Claudiu Năsui: "It is welcome that it is coming to make life easier for small producers. The gain can be double for the economy" / But what are the challenges of implementing the initiative?

Launching a small business directly from the phone, without prior authorizations, accounting or tax returns, could encourage entrepreneurship and could bring to light some of the activities carried out in the informal economy. Economist Stas Madan welcomes the "START Enterprise" initiative, presented by the Minister of Economic Development and Digitalization, Claudiu Năsui, but draws attention, on the other hand, that the success of the reform will depend on how the operating rules will be established.

According to the expert, the new mechanism would allow small producers to operate under a simplified regime as long as their turnover does not exceed 1,7 million lei, the threshold up to which VAT registration is not mandatory. However, Madan emphasizes that the draft has not yet been published for public consultations, and a number of essential aspects, from taxation and social contributions to product safety and prevention of abuse, require clarification.

In an exclusive comment for Cotidianul.md, the economist drew attention to the difficulties faced by enterprises in the manufacturing industry and the need to reduce administrative barriers for small producers.

"Data on the survival rate of businesses after the first year of activity show that the manufacturing industry is by far the sector with the lowest survival rate. Given this reality, it is welcome that it is coming to make life easier for small producers. The basic idea of ​​the presented project is to have control after and not before approval. We are basically talking about a model of a small business started from home, without prior approvals, accounting or tax returns. The activity could be launched directly from the phone, and compliance with the rules would be verified later, through controls. The announced eligibility criterion is the VAT threshold, meaning that entrepreneurs could expand their businesses in this simplified regime up to the VAT non-registration threshold, i.e. 1,7 million lei", said the economist.

Madan believes that simplifying procedures could have two positive effects on the economy: the emergence of new businesses and the legalization of activities that are currently carried out without official registration.

"In this way, the gain can be double for the economy: on the one hand, some could be encouraged more to try due to the more permissive framework, and others who are currently in the informal economy could be encouraged to go white. Especially since within the ODA programs, there is also a financing program dedicated specifically to small producers", the economist explained.

However, the economist emphasizes that the initiative is still at the concept presentation stage, and the authorities need to explain more clearly how the new regime will work.

"However, it is important to note that the benchmarks of this idea were presented by Minister Năsui, but have not yet been published in a draft for public consultations to see more precise details regarding the implementation of the given idea. At the moment, it would be appropriate to see more clarifications and details related to aspects such as: List of excluded activities - will there be 'zero approvals' for all activities below the threshold or only for those with low risk? Rate and base of the 'automatic' tax - income received, dedicated account, SFS sheets? How are social and medical contributions treated? Legal form - are we talking about a new type of individual enterprise or a regime applicable to existing forms?", said Stas Madan.

Finally, Stas Madan draws attention to the fact that the elimination of prior approvals must be accompanied by effective verification mechanisms and rules to prevent possible abuses.

"Likewise, it is important to see how the ex-post control capacity of SFS and ANSA will be implemented, plus consumer protection and food liability. It is also important to foresee how we make the transition to exceeding the turnover threshold, but also how we avoid the risk of artificial fragmentation of businesses below the ceiling", the economic expert concluded in his message.