Experts of the Secretariat of the Economic Council to  the Prime Minister convened the first meeting of the Working Group No. 3 on the reform of tax control and post customs clearance. The meeting was attended by representatives of the State Chancellery, the State Tax Service (SFS), the Customs Service, the business community and other stakeholders.

The participants are to review the regulatory framework with a view to improving the situation, as stipulated by Government Provision 108-d of 25 July 2023. According to the participants in the discussions, the main shortcomings in the field of tax control relate to the high share of unannounced controls, the lack or insufficiency of proportionality of the duration, frequency of tax control and the method to be applied in relation to the risks and potential damage.

It is therefore proposed to identify limits on the annual frequency of visits to the same person, including the exclusion of the possibility of temporarily suspending the control. Another proposal would be to lay down clear and certain rules on the grounds for identifying a duration of checks, for extending checks. Valeriu Vlas, Deputy Director of the State Tax Service, said that the average duration of tax controls is 15 days, compared to 60 days set by tax legislation.

However, according to participants at the meeting from the business community, some controls can last much longer, even beyond the legal deadline. Another important topic was the need to include in the legislation the requirement for the SFS to carry out controls in accordance with checklists.  This is because today the control is not always clear, the inspector’s actions are less predictable, in the absence of certain procedural limitations, including the lack of detailed checklists. Valeriu Vlas, Deputy Director of the State Tax Service, supported this proposal, saying that he agreed to move forward on this segment, but based on the complexity of the controls carried out by the Tax Service. Another proposal concerned the revision of the way of evaluating the performance of the SFS and the performance indicators in particular.

This is because the SFS is largely guided by performance indicators that are based on “outcome controls”, i.e. controls that generate revenue.  It is proposed to focus on promoting voluntary compliance and lessening the burden on bona fide economic agents as a result of their interaction with the SFS. These and other issues have largely been identified by business associations. Proposals to address them are largely based on practices and principles promoted by the Organisation for Economic Co-operation and Development, including mechanisms and principles on state control of entrepreneurial activity that currently exist in Moldova.

The reform of the system of state control over entrepreneurial activity is planned for 2023-2024 and is being promoted with the support of the business community, members of the Economic Council, representatives of state institutions and donor organisations.

The Secretariat of the Economic Council to the Prime Minister is supported by the European Bank for Reconstruction and Development, funded by the UK Government’s Good Governance Fund, and the International Finance Corporation’s Investment Climate Reform Project funded by the Government of Sweden’s International Development Agency.

The Secretariat of the Economic Council to the Prime Minister is supported by the European Bank for Reconstruction and Development, funded by the UK Government’s Good Governance Fund.