THE LETTER OF THE GOVERNMENT TO THE IMF INCLUDES GOODS NEWS FOR INVESTORS: The payment of taxes on capital gains, to be simplified by next month

Investors will soon be spared from having to go to the offices of the tax administration to pay their taxes on capital gains, according to the draft of the letter of intent to the IMF, obtained exclusively by the BURSA newspaper.

The simplification of the filing and payment procedures of the taxes on capital gains will be made through measures which will be implemented by next month, the aforementioned document states. The measure will be achieved by switching to a system based on advance withholding of the payments made by the brokerage firms and a single statement which taxpayers will fill out at the end of the year.

This piece of news is extremely good for investors, who currently have to go to the offices of the tax administration five times a year, to pay the taxes on their capital gains.

Dumitru Beze, the president of the Association of Investors on the Capital Market (AIPC), said that, ever since last year, the AIPC has asked the Ministry of Finance to implement the idea of one tax return instead of five: "In spring this year, the AIPC and all the players of the stock market have succeeded in convincing the Ministry of Finance and the IMF of the usefulness of this simplification".

Also, the government intends to provide a neutral treatment when it comes to provide a neutral tax treatment for the cessation of bad debt in the banking sector. The measures intended to streamline the taxation system, agreed with the IMF in its previous letter of intent, will be approved by the end of September.

The reduction of the number of taxpayers registered as VAT payers is expected to start generating results starting with the month of July. Starting with the end of last year, 11,000 small taxpayers were removed from the list of VAT payers, the draft of the letter states.

The legislation concerning the preparation of a simplified fiscal regime for small taxpayers will be completed by the end of October.

The government has received the approval of the Council of Ministers of the European Union to raise the ceiling for VAT payers to 65,000 Euros.

The restructuring of the National Tax Administration Agency (ANAF) will continue. The goal of the authorities is to consolidate eight regional directorates by the end of next year and 221 local tax offices by the beginning of 2015.

The government is also improving its inter-operability with the National Customs Administration and the Financial Fraud Squad (Garda Financiara), to improve tax collection. A central unit, intended to fight intra-EC fraud, focused on the high risk sectors, is expected to be set up by July 1st.

Almost 90% of the requests for the reimbursement of taxes sent to the ANAF by companies, in the month of March, were made using electronic channels. The government has made the commitment to pass by the end of the year all of the necessary regulations to complete the integration of the liberal professions into the tax collection process by the ANAF, and to allow individual taxpayers to file a single statement for the income tax and social security contributions starting with 2013.

Considering the fact that several deadlines for the implementation of plans of action based on the revisions of the functions of ministries and public agencies haven't been carried out, a new oversight procedure will be implemented by the end of July, and the Ministries will propose corrective actions, progress benchmarks, as well as new realistic deadlines for reporting.

The revised legislation in the area of public procurement will be set up by October, and the deadline for its implementation is the end of 2012.

In order to increase the ability of the authorities to handle the potential problems in the banking sector, the Central Bank (NBR), The Fund for the Guarantee of Bank Deposits (FGBD) and the Ministry of Public Finance will coordinate the implementation of operational plans, as well as arrangements for the new powers in the areas of banking regulation. The details of the regulatory framework, together with the detailed plans for the potentially vulnerable banks, will be discussed with the IMF and the European Commission by the end of June.

By the end of October, the Executive will amend the Government Ordinance no. 10/2004, concerning the liquidation of lending institutions, to ensure that the treatment applied to the subordinated debt in the list of creditors will be determined by the contractual conditions, rather than the capital requirements. The Law no. 503/2004, concerning the bankruptcy of insurance companies, will also be implemented by the end of October, the draft of the letter of intent says.