Causes and effects of tax evasion
The tax evasion is determined by the action of various factors, the most important being:
- the existence of tax legislation with gap, inconsistences, ambiguities, flaws and repeated changes;
- misunderstanding of the tax authorities of the reasons that determine the tax payer to evade the tax system;
- the existence of high tax pressure;
- ineffective and inefficient in use of public financial resources;
- existence precarious financial status among taxpayers;
- inefficient guidance and assistance to taxpayers;
- inefficiency of fiscal control;
- the existence of low fiscal education.
What are the means of tax evasion?
When burdens are too high and push too much on the material taxable, taxpayers tend is to “escape”. Human nature always put first individual interests to the detriment of general interests. In this regard, taxpayers tried to evade tax payment, using various means, yet be considered mandatory levies bringing damage to property and earnings.
In general, it is difficult to determine all means of evasion as they are limitless. Within fiscal activity, there are more frequent means of evasion:
- issue of false statements;
- issue of fictive payment documents;
- issue of fictive book-keeping;
- non-declaration of taxable matter;
- declaration of less income than the real income;
- issue of double book-keeping, real and fictive registers;
- diminution of imposable matter due to less turnover by registering fictive expenses;
- sales without invoice, as well as issue of invoices for fictive sales which hide real operations due to taxation.
Conclusion
In the current period, Romanian tax system needs improvement.
Identifying opportunities for improvement in the tax area in Romania, requires consideration of the following issues: establish an optimal correlation between the structure of taxpayers and changes in tax system; tax return analysis; strengthening the role of fiscal management to achieve fiscal activity performance; increase voluntary compliance; improve the image of Romanian taxation; appropriate use of numerical fiscal rules; efficient use of an Integrated Financial Management System.
The benefit of these training opportunities will be felt, only insofar as, will diminish the acts and deeds of tax evasion.
“The vicious circle of taxation” creates “pain”. State “complain” frequently for low level of public resources, and taxpayers “complain” about the extent of tax liability and the way public money is spent.
It can break this vicious circle? The answer is yes, provided that, the rationality level of taxation offers better responsiveness to the taxpayer burden.
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