“Before the revolution [of 1989] we used to queue for meat, now we are queuing to pay taxes,” says Ion P., a sole trader who had been queuing up for half an hour.
While all fiscal administrations in Europe are chasing money, seeking to improve tax collection and reduce fiscal evasion, in Romania people still have to queue to submit tax forms and pay taxes.
On Wednesday expires the deadline by which firms in Romania have to submit a series of documents necessary for the payment of taxes at the fiscal administration offices.
A small-sized firm that does business in Romania is required to submit around 50 statements to the fiscal authorities every year. A good amount of these documents are submitted on a monthly basis, while the rest are submitted once or twice a year.
For instance companies’ balance sheets are submitted to the fiscal authorities twice a year in physical form, while the rest of the documents are submitted half-yearly or yearly.
The fiscal authorities in Romania have for a few years introduced the possibility of monthly statements being submitted online, but there are also documents for which a company’s representative needs to go to the tax authorities: half-yearly and yearly balance sheets and the so-called statement 394. What is statement 394?
The document is submitted on a half-yearly basis by all VAT payers in Romania at tax authorities offices. In this statement, payers of VAT (firms and sole traders) declare all their acquisitions and transactions. This form is used by the authorities to prevent tax evasion.
“We have to submit this document twice a year in physical form at the fiscal authorities’ office, that is why people are queuing,” said the representative of a small firm in Bucharest.
The crowding as the deadline for submitting documents in physical form to the fiscal authorities could be significantly reduced this year as the only documents to reach fiscal administrations as hard copies will be half-yearly and yearly statements as of February.
“For statement 394 both the reporting software and the method of submitting the statement (from physical form to online) will change as of January 2012,” shows an ad posted on the fiscal authorities’ website.
In the summer of last year, the fiscal authorities announced their intention to urgently buy, through an auction, worth EUR7 million, IT equipment and solutions that would allow them to expand the stocking capacity of the institution’s data center so that hundreds of thousands of firms would no longer need to submit statements printed on paper, but online, as of July 25.
These were single form 112 on social security contributions, the income tax and statement 394 on deliveries/services and acquisitions made in Romania. The emergency of organizing the auction was to do with the storage capacity of the fiscal authorities, which was exceeded.
What fiscal consultants say
The reform of the fiscal administration is a long-term process and it is not realistic to expect a fast improvement of the situation. However, one cannot be indifferent to the fact that the reform focused on internal aspects (cost cuts) and not on improving interaction of taxpayers with the fiscal administration, i.e. of procedures and of the IT tax management system, says fiscal consultant Emilian Duca.
“The physical submission of fiscal statements is based on a reality ignored by many: people don’t trust IT systems, mainly because their interface is not user friendly,” Duca said.
Although the online submission of statements is available to all tax payers, using the digital certificate can prove costly for small and medium-sized enterprises. A digital certificate costs around EUR50.
We have an employee who does the queuing
On the other side, Romanian entrepreneurs who set up businesses of tens of millions of euros per year and who pay several hundred wages at the end of each month, say that bureaucracy prompted them to hire people whose sole responsibility is to queue up and submit documents with public institutions.
“I have someone who does only this, submit documents put together by the company’s accounting department and gets papers from various institutions. We are from Alba Iulia and since our company is included in the major taxpayer category, someone has to come to Bucharest even to get a fiscal certificate,” says Emil Elisiu Gota, general manager of Elis Pavaje, a producer of border stones, with EUR12.7 million in turnover last year.
(English version by Daniela Stoican)