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Tax evasion bill

Persons accused of tax evasion may escape prosecution in certain circumstances.

Tax evasion bill
Tax evasion bill

, 10.10.2018, 12:49

The MPs in the Romanian Parliament’s legal committee have approved an amendment to the bill to revise the law on the prevention and combating of tax evasion, a move that has caused controversy. The amendment stipulates that persons accused of tax evasion may escape criminal prosecution if they pay the damages caused. The measure can only be applied once if, during criminal investigation or until the first hearing, the person in question pays the damages caused by tax evasion in full, as well as a 20% penalty fee.



Finance minister Eugen Teodorovici says he supports any European measure that seeks to recover losses because, in recent years, the state has proved to be a structure that fights against business people and this must stop. He has also announced that the government will propose legislation by the end of the year for a European practice in this regard to be also adopted in Romania.



Eugen Teodorovici: “We in the government have approved a memorandum to have a wider discussion with the finance minister, the justice minister and all the other bodies involved in tax evasion management so that by the end of 2018 we can come up with a bill to amend a number of legislative acts on tax evasion. The aim is to adopt a practice used in more advanced European states by which the state seeks to recover the losses and not necessarily close down companies, send its shareholders to prison and other such actions.”



The only votes against this measure in the legal committee came from the MPs of the Save Romania Union, who argue that such measures cannot be taken without an impact study. Save Romania Union deputy Stelian Ion does not rule out a challenge in the Constitutional Court if this version of the bill is adopted, and explains his party’s objections.



Stelian Ion: “Not having a foundation, the move may appear as aiming to benefit certain people and as being superficial and unprofessional, so we cannot possibly support it. The possibility to reduce maximum sentences if damages are repaid in full by the time of the first hearing, which is currently stated in the law, is replaced with the obligatory cessation of criminal prosecution. Is this measure opportune? Won’t it lead in fact to an increase in crime in the area of tax evasion?”



Experts agree that the high rate of tax evasion in Romania, which accounts for some 30% of the GDP, calls for urgent measures. They wonder, however, if it’s fair for the tax authorities to block the accounts of ordinary citizens for debts of a few Euros while tax evaders hiding millions can escape criminal prosecution.

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