Romania To Reward Informers on Tax Evasion

Authorities in Romania plan to reward snitches in order to reduce the high level of tax evasion, one of the owrst in Europe.The tax authority in cash-strapped Romania is planning to offer financial rewards to people who denounce individuals or companies for tax evasion, officials have announced.

“The idea is based on the informer system in Sweden, whereby people are encouraged and rewarded to give information about the wealth of their neighbours and companies,” the Finance Ministry’s state secretary, Liviu Voinea, said.Voinea added that a the US Internal Revenues Service uses a similar system, which offers a reward of 30 per cent of the recovered amount.

Romania is under pressure to reform its tax system and increase the tax intake, as the country is losing millions of euro a year in unpaid taxes.

The center-left government is also planning to start taxing swimming pools built on people’s private properties, similar to taxes on buildings and plots.

Houses received as inheritance, which are currently not taxed as a second home, could also be taxed in future, within six months to a year from being inherited.

Romania’s taxes are currently worth only around 0.7 per cent of its Gross Domestic Product, GDP, well below the European average of 3 per cent.

Analysts say that one explanation for the high rate of tax evasion in Romania is traditional distrust in the political class that spends the taxes.

Last year, a report from the Association of Italian Taxpayers ranked Romania as the second worst offender for tax evasion in the European Union after Italy.

More than 51 per cent of taxable money was reportedly not declared in Italy, compared to 42 per cent in Romania and 38 per cent in Bulgaria.

Ironically, prosecutors last month opened the prosecution of the former chief of Romania’s tax administration ANAF, Sorin Blejnar.

He and other officials are accused of complicity in tax evasion and supporting a criminal organization.

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