The HoReCa sector benefited most from the tax reform in Moldova, but it continues to conceal the real trade turnover - Ion Chicu
The Finance Minister wrote about this on his social network page, noting that the authorities would take concrete actions to increase the tax discipline of entrepreneurs and radically reduce their “appetite” for tax evasion. According to Ion Chicu, the analysis of compliance with the new tax legislation across sectors shows an uneven increase in the level of social responsibility and tax discipline. He noted that the dangerous attitude towards incentive measures introduced by the government through tax policy (tax reform package) is manifested in some sectors and, in particular, in the HoReCa sector (hotels, restaurants, cafes), which actually benefited most from tax reform. In the sector, it was reduced by 5 percentage points the employer's contribution to the state social insurance budget, other tax benefits for the payment of salaries were granted, the amount of VAT on HoReCa services was reduced from 20% to 10%. However, as the Minister of Finance noted, the analysis of the level of wages in this sector (data from about 600 companies were analyzed) showed that the average wage in this sector was only 2792 lei at the end of the 4th quarter of 2018, which is about 2.5 times less than the average in the economy. In the overwhelming majority of cases, the HoReCa industry does not issue cash checks and, therefore, hide the real turnover in this sector. Ion Chicu said that after setting up a tax post in one of the cafes on the “pedestrian” street near the Ministry of Finance, it was found that the real volume of daily sales exceeds 4 times the previously declared. The head of the Ministry of Finance noted that even at the stage of promoting the tax reform, he doubted that all businessmen would correctly and adequately understand the message of the government and increase the degree of compliance with tax legislation. According to him, along with the reduction of taxes and fees, carried out together with the abolition of criminal liability for some tax violations, decisive action will be taken to eliminate unfair competition among economic agents and their appetite for tax evasion will be sharply reduced. Ion Chicu noted that the State Tax Service has already developed and is implementing its action plan in this direction. The head of the Ministry of Finance sincerely thanked those economic agents who adequately responded to the government’s efforts to improve the business climate and significantly increased the level of tax compliance. He also called on everyone else to weigh very well the advantages and disadvantages of their tax evasion actions, noting that the advantages are simply illusory. The Minister of Finance also urged consumers to be more demanding and ask for cash receipts in order to prevent merchants from evading taxes and gain super-profits. // 29.03.2019 - InfoMarket.