Finance Minister applies 'drop by drop' strategy

The Finance Minister maintains that a firm which reports turnover worth just 250 euros/month is guilty of fiscal evasion, but that he does not have enough money to control all suspect taxpayers and therefore applies the lump sum tax.

“Drop by drop makes a lake”, this is the philosophy of finance minister Gheorghe Pogea in applying, starting May 1, the lump sum tax from 500 to 10,000 euros for the firms that report losses or a profit tax lower than the lump sum level corresponding to turnover. “Apparently, it’s a tax on losses,” maintains Pogea in an interview with ZF. The “lake” the minister speaks about would mean additional budget revenues worth around 355m RON (86m euros), complemented by the 348m RON, derived from limiting VAT deductibility in the case of passenger car and fuel acquisitions. Pogea says that the lump sum tax correlated to the turnover of each firm will be insignificant in terms of value, but will allow the fiscal authorities to make sure that firms systematically reporting losses also make some contribution to the state budget, like “honest taxpayers” do. The finance minister rejects the idea that the new taxes are worsening the financial situation of those honest taxpayers that are slipping into the red because they lack markets to sell on amid the crisis and not because they supposedly decided to turn to fiscal evasion. On the other hand, the minister admits that the introduction of this type of tax proves the impossibility of fiscal authorities to control evasion. “Expenses related to control, to the wages of those who should do this, would be huge and the state does not afford them (…),” the finance minister says. For some entrepreneurs now slipping into the red as a result of the crisis, the new tax is an urge to liquidate their businesses.