BUSINESS

Alcohol tax evasion incurred state budget loss of EUR 4.5 bln.

The woes experienced by the spirits market as result of the economic crisis over the past two years are compounded by tax dodging, which led to 80 per cent of the legal market going bankrupt and 7,000 jobs being lost, Romulus Dascalu, Garant president, told a press conference.

“The overall loss that tax evasion has incurred during the past seven years amounts to EUR 4.5 bln, of which losses related to VAT and other taxes add up to EUR 1.2 bln. These figures alone are indicative of the fact the IMF loan would not have been necessary had the black market been prevented from growing to such a huge size. State authorities being involved in the process makes it an extremely serious issue,” Dascalu also said. Illegal practices in the sector led to the overall share market held by Garant members to drop by over 20 per cent, Dascalu said, who added that “smart guys” have emerged in this sector too, who have found new means to skip paying taxes, namely selling products at prices below excise value, a method of self-induced insolvency.

Other such methods include unregistered  production, either raw material or finite product, use of faked strips of paper, fictitious exports of alcohol and alcoholic beverages, sales of alcohol-based products registered under other categories of non-excised products, technical alcohol, sanitary alcohol and others. The number of paper strips released dropped from 460 M in 2003, to 140 M in 2010, with the decline caused not by lower alcohol consumption, but tax dodgers,” the Garant president also explained.

Among the Garant-proposed tax evasion crackdown measures, more efficient controls by authorities in charge of preventing the illegal marketing of alcohol and the National Agency for Fiscal Administration  charging product-category-based excises.

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