How did a company that paid exemplary all its taxes to the state end up with a criminal record, but the evasionists still get away: “The problem is translation”

Economist Gabriel Biriș, one of the most respected taxation experts, reports the case of a company that paid all its taxes, but ended up with a criminal record for an unusual reason. At the same time, if some are penalized out of overzealousness, many of the real evasionists do damage to the state, but without the competent bodies making efforts to recover the money.

A pharmacy chain that has paid all its taxes to the state has a criminal record. PHOTO: Freepik

Taxation expert Gabriel Biriș explains how bizarre and totally absurd situations are reached in which fair companies receive fines and criminal cases even though they have done nothing wrong, while many evasive companies manage to escape year after year from the long arm of the Tax Office. Biriș describes an outrageous case, about how a pharmacy chain that followed the law exemplary ended up with a criminal case. The respected tax expert narrated this case in detail on Facebook and demonstrated that the authorities did not take the law into account when they decided to file a criminal case against the company.

“The night of the mind, again and again! A state body, in this case the Customs (ANV), conducts a check on a taxpayer. The body finds that the controlled company – with almost 200 employees, is a “pharmacy”, that it has paid its excise duties 100% correctly, that all sales are with an invoice or tax receipt, that the VAT has also been calculated and paid correctly (rarely!). At the end of the minutes, comes the congratulations: criminal complaint!”writes Biriș.

An absurd case

The surprise of the criminal complaint has an explanation, but, on the other hand, it is absurd, Gabriel Biriș believes. In this case, clearly, it is an abuse of the state. It is interesting that, the expert points out, in Romania the word cigar does not even appear in the Fiscal Code.

“Why? Because he sold cigars by the piece, without the stamp on each of them (the stamp was – obviously, stuck on the box)! I confess, I also have a vice: I'm a cigar smoker So, I know the market, from here and from many other countries. Everywhere, cigars are sold by the piece! Would they all be criminals? I don't think so… Technically, the case is interesting, the problem being translation (the word “cigar” does not appear in the Fiscal Code). In short, we have this: “cigarettes” – these are the things we call “cigarettes”, chopped tobacco, rolled in a sheet of paper, with or without a filter, packed in packets; – “roll cigarettes” – they look like “cigars”, but inside they have chopped tobacco wrapped on the outside with a sheet of tobacco. Leaf cigarettes, they are made mechanically, they are also much cheaper than cigars, they are generally sold in boxes; “cigarillos” – they are still leaf cigarettes, but much smaller (sold in packs); “cigarettes” – only now we also reach “cigars”, which do not contain chopped tobacco, but only rolled tobacco sheets, wrapped in a tobacco sheet. Cigars are made only by hand, which is why they are also significantly more expensive than leaf cigarettes”is its explanation.

Sanctioned for an imaginary fault that does not exist in the Fiscal Code

At the same time, the Fiscal Code does not provide that the sale of cigars without a stamp would fall under the crime chapter. However, that company chose to file a criminal complaint, due to the authorities' overzealousness.

“The tax code provides that it is a crime to sell without a stamp on a package for cigarettes, rolling cigarettes and cigarillos, but not for cigarettes (ie cigars). Lost in translation or not, it doesn't matter, we file a complaint! Let's recap: A team of 4 inspectors works for a few weeks on an audit, finds that the audited company is a correct taxpayer, has paid everything it had to pay (excise duty, VAT). They file a criminal complaint against it. The whole market (specialty shops, restaurants and more sophisticated clubs) has the same behavior, so (unless the control was “dedicated”) they will make a few dozen more criminal complaints, after a few dozen more checks that will keep them busy for a few dozen more weeks in total”he also writes.

The sequel is equally interesting and leads to the expected conclusion.

“Several dozen criminal investigation teams will spend another tens of weeks/man to complete the files. Several dozen prosecutors will have to analyze the cases and – most likely, they will give NUP that there is no crime. ANV lawyers will attack in court the resolutions of the prosecutors, actions that will keep dozens of judges busy, the merits and the appeal. If the prosecutors still decide to send the cases to trial, several dozen other judges will solve the cases, fund and appeal. To keep people busy so they don't have time to catch evasionists? Why should we spend millions for nothing?”, says Biriș indignantly.

Correctness is not a guarantee before the inspectors

The tax expert concludes that entrepreneurs, in many cases, are simply abused by the Tax inspectors, and in some cases they are fined and sanctioned for imaginary irregularities. If the correct ones are often punished exemplarily, the corrupt companies, those who do not pay VAT or harm the state in other ways get away with it very often, proof of the fact that Romania has one of the lowest budget collections for VAT.

“Ah – and from this whole story, let's not forget the most important thing: the MAN, our entrepreneur (everyone here is Romanian, because the market is too small for multinationals). He works, develops the company, develops the market, hires, pays taxes and contributions to the budget “clock”, month after month, and for this the state “rewards” him with a criminal complaint! Makes sense, right? PS Real life! I have a few more such “stories”, of very recent date… Pps. I, for one, thought that Customs was in charge of collecting excises and customs duties for the budget, combating smuggling on the borders or in the already “famous” port of Constanța. Looks like they're an error, they have other things to do…“, concludes Gabriel Biriș.