The government of Romania, working with recently established representative body, Romania Active, has delivered a radical new policy by declaring that payments made for health club memberships – and a raft of other preventative services – will be subject to generous tax breaks.
A new law will result in all gym and health club subscriptions being made tax-free and tax deductible up to the value of €400 (US$442, £355) per year for each employee, meaning companies can offer gym memberships and other fitness subscriptions as non-wage benefits.
The tax exemptions also cover companies offering “mixed preventative care”, which covers physical activity and medical subscriptions relating to recovery and recuperation – all important to the growth of the sector.
Tax-free subscriptions can also be offered to the children of employees and other people in their care, further extending the reach of preventative measures in Romania.
On page 14, Kent Orrgren, president of Romania Active, tells HCM: “This is a huge breakthrough and the new law is a valuable recognition of the importance that physical exercise has for the health of the nation and the impact the fitness industry has on the health of the economy.”
At a time when the industry globally is battling for recognition and support from governments, as well as a seat at the table when it comes to the whole prevention agenda, this is a most welcome breakthrough and will give heart to other representative associations battling for similar recognition.
It could also offer a framework for consideration by other governments and once results are available to show the impact of this investment on the economy, this evidence will be invaluable to the sector when it comes to representation.
The move is not the only support being given to the health and fitness and wellness sectors in the burgeoning Romanian economy – tax breaks are also available for inbound investment, corporation tax is low at 16 per cent and a law determines that profits reinvested in tech – including fit tech – are exempt from taxation, creating a fertile environment for growth.
As the world grapples with the twin challenges of rebuilding from the impact of COVID and tackling soaring health costs, the case for government interventions such as this – as well as a more effective focus on prevention – are ever more powerful and we hope that this breakthrough will be the first of many as the governments of the world wake up to the power of turning to wellness.
