Burdening honest taxpayers with administrative and bureaucratic issues such as split VAT accounts is not a good strategy to curb tax evasion in the long run, said the organization that represents over 130 multinational companies operating in Romania.
FIC said the measure would cause major blockages in the activity of all parties involved, from companies that will have to implement the new system to state treasury units that will set up the accounts and the tax authority that will have to approve a large number of transfers from current accounts to VAT accounts in a short amount of time.
The organization calls on authorities to consult the European Commission on the matter and to make an impact study to assess the measure’s effect on tax evasion and its costs on the business environment.
In Poland, the organization said, the split VAT system was under public debate for two years, the system is optional and its implementation has been postponed until 2018 at the request of the business environment.
An alternative, FIC said, would be to implement the split VAT system as a pilot project in fields of activity where tax evasion is high and then extend the system if it proves efficient.
Romania’s government on Wednesday adopted a decree making separate payment accounts for the value-added tax mandatory as of January1, 2018 and expects to collect an extra RON6 billion to the state budget until 2020.