Only 77% of debts owed by companies to NPB are recoverable, report

The outstanding debts owed by companies to the National Public Budget totaled 1.14 billion lei as of January 2011, and only 77% of them can be recovered, according to an audit report presented by the Court of Accounts, Info-Prim Neo reports. The report, which examines tax operations handled by the State Fiscal Service (SFS) in 2010, shows that the SFS didn't meet its revenue targets in some of its territorial jurisdictions, including Chisinau and the Gagauz Autonomy. The NPB also missed 261 million lei in VAT payments because of ghost companies. False invoices were also highlighted as a problem. The audit also suggests that the monitoring procedures by the SFS of import transactions and of price formation processes in internal trade were inadequate, as the risks of tax evasion resulting from these remain great. Talking about debts to the NPB, which rose by 95 million lei or 8.3% in 2010, SFS head Nicolae Platon said the rise was due to the fact that many companies expect a new tax amnesty any time soon. Another reason is that a significant part of the accumulated debts are owed by municipal utilities which provide vital services to the population. “Enforcing payment of fiscal liabilities by these companies would mean leaving people without tap water, heating and other necessary services. This is a problem of the national economy, not just of the Fiscal Service”. He added that the Service submitted a number of proposals to modify the law so as to increase its capacities in managing liabilities. Valeriu Chitan, a member of the Court of Accounts, said the institution would also formulate recommendations to the Government and Parliament to amend the legislation so as to consolidate the Service's capacities. “But before asking for new instruments, it is necessary to effectively use the existing ones. Unfortunately, these are not used to their full effect if a third of the territorial fiscal agencies report that they met their revenue targets 120%, but the fiscal debts owed by the companies in their jurisdictions actually exceed the budgets allocated to those agencies” said Chitan. Formulating recommendations, Chitan said that the SFS needed to rethink all the procedures aimed at combating fiscal evasions, rethink the relationship with the taxpayers by maximally reducing the subjective factor in this relationship, and enhance knowledge and skills among its staff.