Romania to Reorganize Tax Administration Systems

April 18, 2012 Taxation in Romania

Tax Administration in RomaniaBUCHAREST – Romania will soon reevaluate its tax administration system, which is currently regarded as having some of the most complex tax environments in the world.

On April 17th the Prime Minister of Romania Mihai Razvan Ungureanu dismissed the head of the National Agency of Fiscal Administration (ANAF), after the department failed to reach its goal of reducing the occurrence of tax evasion in Romania and raising tax revenues by EUR 2 billion by 2012. The Prime Minister also announced that ANAF would undergo a reevaluation of its structure and a reorganization of its operations.

According to the Minister of Finance of Romania Bogdan Dragoi, the optimization of ANAF’s operations will lead to profound changes in the administration of taxes in Romania, with a greater emphasis on electronic filing, information sharing between government departments, and “a decrease in red tape and the improvement of the relationship between the tax payer and the tax man.” It is hoped that the reevaluation will also reduce the number of processes that require taxpayers to visit an ANAF office personally.

Romania is required to reorganize and improve the operations of ANAF as part of a loan agreement from the World Bank to Romania.

According to recent research conducted by the World Bank, Romania currently has the second most complex tax system in the world, with a local company being expected to make up to 113 separate tax payments in a year. The World Bank’s research indicated that companies registered in high-income OECD countries make an average of 13 payments per year. Under the current tax regulations, a Romanian company may need up to 222 hours per year in order to comply with its annual tax filing requirements.

Photo by Justin A. Wilcox