Excessive bureaucracy is not the solution to combating fiscal evasion

The Coalition for the Development of Romania (CDR) supports the efforts made by the National Agency for Fiscal Administration to increase tax collection and combat fiscal evasion, yet considers that ANAF’s recent actions related to VAT registration are disconnected from the economic reality and from the activities of honest taxpayers.

Company functioning is currently hampered by the obligation to fill out the D088 form through which ANAF requests a very big amount of information in a short time span, most of which is irrelevant for the capacity to perform activities within the VAT area of application. Part of this information is extremely difficult or impossible to obtain within the requested timeframe, some of the requirements go against the legislation regarding confidentiality of certain personal data, while a considerable amount of the information requested can already be found in the possession of ANAF or of other public institutions.

The associations and organizations member of CDR have repeatedly drawn ANAF’s attention to the fact that this procedure imposes an excessive and abusive administrative burden on honest taxpayers, and the recommendations made by the fiscal experts of the CDR fiscal workgroup based on European practices have been only superficially and minimally taken over in the recent modifications brought to the D088 form.

We consider that the D088 form is not adapted to the economic realities and does not take into account the time, effort, costs and bureaucracy necessary to obtain the requested information. The lack of interconnection between the databases of different public authorities and ANAF’s incapacity to analyze the real fiscal risk based on public information or on information that already is in its possession, do not have to impact negatively on, and become a burden for, the business environment.

For example, the request to submit the D088 form for taxpayers who change office address but already registered for VAT purposes is an excessive and completely unjustified measure taking into account that these contributors have been active on the market for a long time, that they pay taxes and dues and that their activity should be quite familiar for ANAF representatives. Also, the methodology applied by ANAF for the requested information through the D088 form with respect to the income of Romanian or foreign citizens, administrators or shareholders within Romanian companies, represents a violation against the confidentiality of their personal data.

Combatting fiscal evasion does not have to impact negatively on the honest contributors. The main objective of the fiscal administration should be to reduce bureaucracy and administrative costs and encourage voluntary compliance. In a modern economy the fiscal administration must be severe with those who break the law but equally friendly towards those companies that perform their activities in compliance with the legal norms in force.

The CDR fiscal workgroup publicly expresses its availability to collaborate with ANAF in order to find the best solutions and urgently transform the VAT registration procedure into a truly efficient method of combatting fiscal evasion in Romania and avoiding yet another ‘infringement’ procedure which the European Commission could trigger for non-compliance with the Commission provision nr 112/2006 regarding VAT.

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