Even if it was implemented as a lifebuoy for developing small businesses, the entrepreneur’s patent becomes a measure that increasingly looks like legalized tax evasion and that is actually to the detriment of the state, says an analysis conducted by Grigore Vieru, public policy analyst of the Independent Think Tank “Expert-Grup”.
The entrepreneur’s patent enables the small entrepreneurs to avoid the ordinary legal, fiscal and entrepreneurial frameworks. At the same time, the advantages offered by the patent turned out to be to the detriment of the state interests as they generate risks and unfavorable preconditions for the socioeconomic development of the state. “Nevertheless, the provision will be extended at least until the middle of 2023 even if is perceived as a generator of significant risks to the economy,” stated Grigore Vieru.
The draft law to amend normative fiscal and customs policy documents for 2023 suggests that the period during which entrepreneurs can work based on patent should be extended until July 1, 2023 in order to support these taxpayers and to help them to easier pass this winter given the high prices of energy resources.
Grigore Vieru said that unlike the entrepreneur’s patent, the independent activity offers more advantages for businesses development and these will be more in number in 2023. The bureaucratic and administrative burden on independent activity will be reduced. The ceiling of sales will be raised from 600 000 lei to 1 200 000 lei (or will be eliminated in time). The minimum sum of the income tax will be maintained at 3 000 lei a year.
The public policy analyst formulated a number of recommendations for reducing tax evasion, such as the conducting by the State Tax Service of campaigns to promote independent activity, ensuring of the switchover from the entrepreneur’s patent to independent activity or other forms of organization stipulated by law, performing of planned and risk based inspections at entrepreneurs working based on patent, identifying new measures for protecting consumers.
In a 2016 assessment report on the level of corruptibility of the legislative proposal to extend the period during which entrepreneurs can work based on patent, the National Anticorruption Center said that trade based on patent is vulnerable to manifestations of corruption and favors tax evasion and the continuation of such a practice can negatively affect the economic development of the state owing to the shortcomings existing in this form of activity, especially due to the lack of transparency in reporting and monitoring.
