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Hard times: tax evasion to be punished by up to 25 years in prison

Hard times: tax evasion to be punished by up to 25 years in prison
05.02.2004, 00:00 7

The Americans like to say that no one can escape death and the IRS. These days, as they are under pressure from the international bodies to quench corruption and tax evasion, the Romanian authorities are trying to transplant the drastic American spirit to Romania.

American and German experts, law firms and consultancies teamed up with the National Control Authority to draft a normative act which stipulates that tax evasion will be punished as severely as murder.

This was the founding stone of the ordinance draft on preventing, uncovering and punishing tax frauds, according to which anyone causing damages worth more than one million euros to the state budget is guilty of tax crime, punishable by up to 25 years in prison.

"We have introduced three categories of penalties in this draft. Thus, up to 10,000 euros in damages to the budget account for a contravention, punished by fine. Damages ranging between 10,000 euros and one million euros are deemed as felony tax evasion, punishable by 5-10 years in prison. The frauds exceeding one million euros are considered tax crimes and the guilty parties may go to prison between 1-25 years, depending on the amount of money," Control minister Ionel Blanculescu said yesterday, when he presented the ordinance draft that may be enforced in three months' time.

One of the draft's most spectacular stipulations says that tax evaders can negotiate a lighter sanction with the judges. To do this, they need to give back at least part of the money they owe to the state.

"If we do not introduce this money-back component, we will end up only with prisons crowded with evaders. We need to work out a way to punish those guilty of tax crimes, but also to get back the money the State budget is entitled to. Tax evaders should be given an incentive to bring back the money, instead of stashing it away in tax havens," Blanculescu added.

Thus, if the guilty person confesses to the tax crime and pays the entire debt before the inquiry is finalised, no criminal probe will be launched. However, this can only happen once in ten years. After a final ruling is given, the normative act allows for the detention time to be shortened by up to 25%, in case the convicted person pays back 25-50% of the money owed, and by 25-50% if 50-80% of the fraud money is paid back. If the guilty persons manage to give back 80-100% of the money owed to the state budget, they will spend 50-70% less time in prison.

"In case we find a tax evasion of, say, 10 million euros and the guilty party pays back all the money, punishment can be reduced from 25 to 6 years in prison," Blanculescu mentioned. According to the minister, the National Control Authority and the Ministry of Justice will soon start talks to bring the ordinance draft stipulations in line with the Penal Code.

Tax evasion can currently result into six months to 10 years in prison, according to Law 161/2003 - Anticorruption Law.


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