The share of the underground economy in Moldova has increased over the last decade, to 28% of the GDP in 2013. The tax discrepancy, which is the difference between the potential incomes from taxes and the real incomes collected by the competent authorities, last year rose to about 9% of the GDP or US$9 billion, shows the study “Tax Discrepancy – an invisible reality” that was presented by the Independent Analytical Center “Expert-Grup” on October 28.
According to the independent experts, the tax collection role of the Sate Tax Service is not well-defined. “The Tax Code does not ensure the optimal regulation of taxation. The Code should cover all the taxes and duties, not only some of them. On the other hand, the State Tax Service does not have powers to investigate fiscal offenses and most of the materials sent by it to the law enforcement bodies produce no result,” said Dumitru Budeanschi, program director at “Expert-Grup”.
The experts also deal with the notion of ‘fiscal morality’, which is the people’s conviction that the paid taxes and duties contribute to the development of society. “Though fiscal morality increases, given that the imposed penalties are lower than the unpaid taxes and the culprits are seldom punished, the people have all the reasons to hide their incomes,” stated Dumitru Budeanschi.
The study recommends deepening reforms in justice and other sectors and more insistently fighting corruption. Increased attention should be devoted to the reformation of the pension system because namely the elderly people on a small pension accept to work illegally.
Head of the Main State Tax Inspectorate Ion Prisacaru, who took part in the presentation of the study, said they work to modify the structure of the State Tax Service so that it becomes a more independent institution that can efficiently manage taxes. “The Main State Tax Inspectorate, the National House of Social Insurance, the National Health Insurance Company and the local tax collection services established cooperation relations, but a lot of work is yet to be done. The question is not merging the powers of some of the institutions or liquidating some of them. Their duties should be clearly defined so that they are more responsible,” stated Ion Prisacaru.
