Still long way to go to change tax policy, experts

Some news concerning fiscal policy in 2011 are pretty worrying for taxpayers, said university professor Ion Sturzu at a Radio Moldova show. He referred to the extending of taxable income sources, to the methods and indirect ways of estimating the income tax liability of companies, natural persons and people engaged in professional activities, Info-Prim Neo reports. According to Ion Sturzu, Ministry of Finances’ wish to strengthen fiscal management through more efficient methods is reasonable, but it raises questions when it’s not clear how the estimation will be done. “We don’t know to what incomes of natural persons they referred when speaking about extending taxable income sources. Will this include remittances? Or income from entrepreneurship and activities based on enterprise patents? It’s worrying that taxable incomes will be determined by the Government. It would be better if they were set by law in the Tax Code”, explained Sturzu. Previously, in an interview for RFE/RL's Moldovan Service, Deputy Prime Minister and Minister of Economy Valeriu Lazar described these provision of tax policy included in the 2011 Budget Bill as “too revolutionary”. The Minister of Finances Veaceslav Negruta said the indirect estimation of obligation would be implemented since 2012, while this year the necessary juridical framework should be developed. It will be discussed with representatives of the business community and of civil society during the development and approval of the Resource Framework for 2012-2014 (previously known as the Medium Term Expenditure Framework). He added that such a method of indirect estimation of income is used in other countries as well and cannot be considered revolutionary. “We mustn’t simplify things to such an extent that we tax a natural person’s income for buying more expensive clothes that his wage affords him. We speak about people with luxurious houses, who are considered successful businessmen, but when it comes to taxes we suddenly find out they have no income, meaning they worked at loss”, mentioned Negruta. Former Minister of Finances Mihai Manoli said that the methods in question shouldn’t be regarded as “revolutionary”. “Many countries have this experience. Simply, the tax legislation must be carefully worked on, fiscal workers bust be properly trained and these measures must be discussed with the business community and other categories of taxpayers. When things are not clear enough, the ones who’ll be on the losing side in the dialogue with the State Fiscal Inspectorate are taxpayers unable to “defend” themselves, who don’t have relationships with influential people, meaning the majority”, said Manoli. Asked whether there were any other revolutionary measures in the tax policy for this year, Manoli replied this was a domain where revolutions are not welcome, that needed continuity and evolution. “We’ll speak about an essential change when direct taxes (income tax, entrepreneurship or property taxes) will surpass indirect ones (VAT, excises) in the budget structure. It is a long way till then, considering we import thrice more than we export”, added Manoli. According to the 2011 Budget Bill, indirect taxes will account for 75% of state budget’s overall income.