Tax evasion has reached alarming levels: Romania is losing 507 euros per second

Romania loses 507 euros per second from tax evasion. And while the state can barely collect the current taxes, the coalition is discussing a new tax system to attract more money to the budget. What could the state have done with the money it lost from evasion, find out from Digi24 journalist Kevin Kirmizigul.

Romania ranks first in the European Union in tax evasion. Losses of tens of billions of euros could have been invested, for example, in motorways, schools and hospitals. More than 16 billion euros are lost annually from the fake of the fiscal code – this is the estimate made by the president of ANAF. That is over 500 euros or over 2,500 lei – amounts lost per second. Money that should have reached the country’s budget. With 16 billion euros, over 2,300 kilometers of highway, 3,000 schools and 27 regional hospitals could have been built annually in Romania.

Moreover, with all this money, we would have already had a subway bus to the airport. And the long-awaited highway from Bucharest to Brasov would have been ready as well. Also in this amount, our country would have already had regional hospitals in Iasi, Craiova and Cluj. More than 100 nurseries and 200 new schools, with 8 classes each, could have been built, for example, in less developed areas of the country.

According to the European Commission, we are in the first place in this respect: state finances are reduced by almost 35% of the non-collection of VAT.

In just one year, from 2018 to 2019, the revenue deficit increased by 6 billion lei. That is, even more money lost.

At the level of the EU bloc, the European Union loses a total of over € 134 billion a year, or around € 4,000 per second.

The top countries with the highest tax evasion are led by our country, followed by Greece and Malta. Although the issue of tax evasion is also mentioned in Romania’s national defense strategy for the period 2020-2024, in terms of ways to ensure security, the Romanian state has taken too small steps to reduce the huge losses from the budget.

How much does Romania lose from tax evasion

Total: € 16 billion / year
€ 507 per second / 2,508 lei per second
source: ANAF chief’s estimates, Digi24 calculations

What can we build with the money from evasion?

– 2,366 km of highways per year
– 3,000 schools a year
– 27 regional hospitals
source: pactfiscal.ro

What could we do with the money lost from tax evasion?

– Subway to the airport (€ 1.4 billion)
– Ploiești-Brașov Highway (€ 1.36 billion)
– Iași, Craiova, Cluj Regional Hospitals (€ 1.3 billion)
– 100 new nurseries (€ 230 million)
– 200 new schools with 8 classrooms each (€ 72 million)
source: Digi24 analysis

Tax evasion in Romania

– Number 1 in tax evasion in the EU
– Romania loses 34.9% of the non-collection of VAT
source: European Commission

The VAT collection deficit in Romania

2019: 36.16 billion lei (+6 billion lei)
2018: 30.16 billion lei
source: European Commission

Tax evasion in the European Union

– EU states lose a total of € 134 billion in tax evasion from non-collection of VAT in one year
– losses of 4,000 € / second
source: European Commission

Top EU countries with the highest tax evasion

1. Romania – 34.9% of VAT
2. Greece – 25.8% VAT
3. Malta – 23.5% of VAT
source: European Commission

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