Liberal MP Octavian Popa said that the payment of taxes has been avoided for “impressive sums” in Romania, adding that transactions with offshore firms should be taxed by authorities.
“Panama is not the only tax heaven. We had Cyprus before. There are many more. If we got data from all these tax heavens, we would discover that generally, in Romania, the payment of taxes has been avoided for impressive sums, which I can’t estimate today”, said Popa, who sits in the Parliament committee that oversees the activity of SRI, the domestic intelligence agency.
The MP said that he has worked on amendments to the Fiscal Code, which would force companies to pay a 16 percent profit tax for transactions made with offshore firms.
“This is a change to the Fiscal Code through which companies doing offshore financial operations, economic operation, which will not be fiscally deductible,” said Popa. He added that companies will pay a 16 percent profit tax for sums issued to offshore companies, based on contracts.
The liberal MP said this provision would tackle any illegal transactions that could impact national security, mentioning here potential money that could go to terrorists or bribes that could be transferred outside Romania.
“We are not talking about money transfers, about foundations, only about commercial operations, many of them fictitious trades in which many times the sums are inflated, so that the taxes and profits in Romania are lower,” said Popa.
The MP pointed out that tax authority ANAF and other institutions had known about these issues but did not act. He says something has to be done after the Panama Papers offshore tax scandal has emerged.
Around 100 Romanian names are rumored to appear in the leaked documents form law Mossack Fonseca. Romanian businessmen Frank Timis and Ion Tiriac have been named in the scandal. While Timis admitted that he used offshore firms to pay smaller taxes, Tiriac said that he only had a foundation in Panama and that his firms paid taxes in the countries they operate in.
The ANAF has created a group tasked with finding Romanian taxpayers that could be involved in the scandal.
Finance minister Anca Dragu said that some of the names appearing in the Panama Files are already part of separate investigations carried out by the ANAF.