Update: A tangled fraud case pits Romania’s Government against the Tax Agency’s president; PM fires ANAF head
Romania’s Finance Minister Anca Dragu asked for the resignations of the Tax Agency’s president and vice president after their names appeared in a fraud and corruption case on Wednesday, February 11.
The National Tax Administration Agency – ANAF’s president Gelu Stefan Diaconu said he wouldn’t resign and that the Government should take the responsibility of firing him.
Prime Minister Dacian Ciolos said on Thursday morning that he would dismiss Diaconu as head of the ANAF after he receives an official request from the Finance Ministry to do so.
UPDATE: Prime Minister Dacian Ciolos sacked ANAF's president Gelu Stefan Diaconu and vice president Mihai Gogancea-Vatasoiu on Thursday. He said that he didn't want to maintain a state of ambiguity that would affect the institution's credibility, according to Mediafax.
Gelu Stefan Diaconu was appointed as president of the ANAF in April 2013 by former Prime Minister Victor Ponta. After he took charge, the tax agency has started an unprecedented campaign against tax evasion, controlling both small and large companies as well as individuals.
ANAF has also been more active in advertising its accomplishments via press releases and posts in the social media. In 2015, for example, ANAF has collected EUR 3 billion more taxes than in 2014. The budget revenues thus increased by 8%, to EUR 43.4 billion.
However, ANAF’s measures and methods have also been contested by the business environment on several occasions. (Read: Business sector, unhappy about the Romanian Tax Authority’s measures)
The National Anticorruption Directorate – DNA decided on Wednesday to prosecute ANAF’s president Gelu Stefan Diaconu and vice president Mihai Gogancea-Vatasoiu for abuse of office in a case of EU funds fraud and corruption. Two Roma deputies, Madalin Voicu and Nicolae Paun are also investigated in this case, which focuses on the misuse of EU funds by the local Roma Party Association, coordinated by Nicolae Paun.
According to DNA, ANAF’s president was approached by deputy Madalin Voicu, who convinced him to issue a provision to exempt some Roma taxpayers from paying their social contributions on alleged revenues from civil conventions contracts. Those civil contracts were a part of the fraud.
The Roma Party Association (Asociatia Partida Romilor), which represents the Roma’s interests, had allegedly hired several people to work on the EU-funded projects it coordinated. The association issued fictitious payment documents but never actually paid those people. However, in 2015, the supposed collaborators received payment notifications from ANAF to pay the social contributions for the revenues that they had never received. This is how the whole fraud has been unveiled.
The DNA prosecutors also found that Nicolae Paun, the head of the Roma Party Association, promised those people to solve the problem of the tax notices. He allegedly called on Madalin Voicu who went to the ANAF president and asked him to issue the provision. Madalin Voicu has denied the charges.
Gelu Stefan Diaconu also denied the charges and said he had issued that provision for a wider category of taxpayers and only after being asked to do so by the former Prime Minister and Finance Minister.
He said that the provision he issued exempted a few hundred thousand children from paying health contributions (CASS) for their allowances. People who made small occasional revenues were also exempted from paying the CASS by this provision. Many people received last year tax payment notices worth hundreds of lei for revenues of a few lei, due to an anomaly in the Fiscal Code, and that is what the provision aimed to correct, according to Diaconu.
He also said that he asked DNA to question him or to arrest him and to rapidly clarify this case.
editor@romania-insider.com
