Deloitte: SAF-T can close one sixth of Romania’s massive VAT gap

Romania can collect an additional EUR 1 billion (nearly 0.5% of GDP) worth of VAT per year after the SAF-T system becomes operational, according to Vlad Boeriu, coordinating partner for tax and legal services at Deloitte Romania.

SAF-T is a new system through which taxpayers send electronic reports to the National Agency for Fiscal Administration (ANAF).

"[SAF-T] would mean an increase in VAT collection of about EUR 1 billion per year. We currently raise VAT worth about EUR 12 bln a year, and we have the largest VAT gap in EU," said Boeriu at ZF Live, Ziarul Financiar reported.

"SAF-T means standard audit file for taxation or the standard file for tax control. With a standard file, each company will send data in the same format," he explained.

Romania lost almost EUR 6.6 bln in 2018 from uncollected VAT, Georgiana Iancu, leader of the indirect taxes department at EY Romania, said at a conference, according to Bursa.ro.

Romania still ranks first in the EU in terms of the VAT gap, and estimates show a deepening of the gap in 2020. The first 11 months of 2020 show net VAT revenues of RON 54 bln (EUR 11 bln), down 9.5% compared to the same period in 2019.

"The reasons that contributed to this decline are the increase in VAT refunds by about 11%, facilities for extending the terms of payment of tax obligations, and unfavorable developments in certain sectors generated by the pandemic," Iancu explained.

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