Romanian Govt Adopts Ordinance Against Tax Evasion

According to the draft ordinance, the sale of more than 10,000 improperly stamped cigarettes or more than 200 liters of alcohol, or possessing such quantities outside a bonded warehouse, shall be punished by one to four years in prison.

The bill proposes reverse taxation and introduces VAT on trade with cereal, fruit, vegetables, meat, fish, flowers and construction materials within the European Union. It also raises excises by EUR100 per hectoliter for intermediary alcoholic drinks and introduces excises for fermented drinks, other than beer and wine.

The bill also reintroduces excises on luxury items, such as yachts, perfumes, furs, hunting weapons and jewelry and the Government will shut down duty-free shops by not renewing their licenses upon expiry.

Also, individuals crossing the Romanian border without declaring amounts equal to or greater than EUR10,000 will be charged with a crime and imprisoned for two to seven years, according to the ordinance.

The Government will also extend the powers of the Financial Guard and Customs Authority inspectors and will allow them to stop vehicles for checkups. In 2009, the Government allowed Financial Guard inspectors to seize goods and search public places, courtyards, facilities and gardens if there was evidence that these places hosted activities related to tax evasion or were used to hide documents or goods.

The Government will no longer grant licenses to duty-free shops and currently valid licenses are set to expire in five years from their release date. The quantity of tobacco products and alcohol that can be sold to individuals in duty-free shops will also be limited.

A "Registry of intra-community agents" will be set up on July 1, comprising all legal persons and firms which carry out intra-community trade. The registry aims to enable better monitoring, provide higher budget revenue and fight tax evasion.

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