“Tone at the top.” The term is part of modern (American) corporate jargon and refers to the board’s stated commitment to business ethics.

There is an irony to this term, as it is obviously not enough to have an exemplary speech, to shout loud and clear we don’t, we never do or, as the case may be, we always. In their pragmatism, companies willingly, out of necessity, understood that they had to add something more – clear procedures, functional internal mechanisms of verification and control, systems of protection, so that goals do not contradict each other, and the discourse on the outside matches the discourse on the inside.

In short, it is necessary to show that they use their words in practice (do not use the literal translation “walk the talk”/”speak”from the British equivalent) it is known that in many cases a fish from the head… (same meaning in English)The fish rots from the head down“).

I thought of such pragmatism when I heard the Prime Minister compliment an audience of business people at AmCham last week:I will try to be pragmatic as I learned from you“. He also told them to go back to their investment plans because “we will not raise taxes. Predictability is required, investments cannot be made with words, our common goal is to determine what we must do together to make your companies as profitable as possible“.

I agree 100% with this tone, which comes from the most knowledgeable top. But what are we counting on?, was a well-known question. However, it is a political spectacle that, on the one hand, you demand grandiose investment plans, and on the other hand, you impale all those who cannot report bitter returns above 6.25%, taking away their value anyway , an annual fee of at least 500,000 euros (already known and incorrect “minimum sales tax“).

Also last week another seasonal training from the Minister of Finance. “There is no reason why our country should adopt a progressive tax system. Of course, it is the responsibility of the Ministry of Finance to conduct various analyses, some of which are even proposed by international financial organizations. However, we do not plan to change the single tariff. Thanks to this, we are financially competitive in the race to attract investors“.

I am glad that the Ministry of Finance has time to make such analyzes in the eyes of international organizations. What do these analyzes say? Why are we not seeing results either? Maybe there are numbers that we can’t know from the outside, why keep them secret? Let’s settle the issue once and for all and leave the ideology, just don’t keep it only in election years! (1)

And then, if we stand up for the common ground, fighting to win the tax competitiveness race (I hope it’s a race like a run!) … we can get an idea of ​​what kind of tax system awaits us next year!

Here is rather a case study on how not to wake up investors! First you just tell them that”horizontal monitoring“! You show them the order and some annexes published on January 15 without any minimal information/introduction in the large taxpayers section of the ANAF website (they were also not published in the Official Gazette). You tell them that “implementation of the pilot project Horizontal monitoring for large taxpayers was approved, a term used internationally for real-time monitoring of individual large taxpayers“. Invitations to participate will be sent in January to all large taxpayers who meet the requirements for participation in the program, any applications for participation will be submitted by February 15, and ANAF will analyze them by February 29 and appoint five participants. Then you you can’t tell them anything. How many were invited, how many responded, how many were selected? Horizontal rest!

For those who ask why monitor this obscure program, the answer is short: because the stakes are too high to remain obscure!

The term “horizontal monitoring” is starting to become part of the modern jargon of tax administrations. They commit to a contractual partnership with their taxpayer, whom they will refer to as the client. Hence the idea of ​​the horizontal – both sides are on the same level, looking eye to eye (2). Of course, the position is not quite equal, because the administration does not abandon the main role of monitoring and control, but only performs it in a different style, based on trust, transparency and mutual understanding. And this triad stems from a very pragmatic idea: first, the administration and its client appoint one representative each, through the book they will constantly maintain a dialogue channel.

Why am I doing this? The first gain for both parties is that in this way they can better understand the other’s position: the state understands the specifics of the client’s activities and risks; the client understands the administration’s need for information and is even ready to check himself through the internal control mechanism. The benefits go further: the administration has confidence in the amounts it collects (on time, nota bene) from a better-informed client who hates their taxes less (3), plus they can better direct their resources to control the real tax criminals; the client gets more tax certainty (in real time, nota bene) and therefore less expensive tax compliance. (4)

This is not an idyllic picture, but a purely pragmatic one. So pragmatic that the British, the pioneers of the system customer relationship management in the tax administration, large taxpayers were automatically included in the program. Thus, it is not only the purely fiscal benefits mentioned above, but also sends a radical signal fiscal competitiveness in the competition to attract investors.

The Dutch, who first coined the term “horizontal monitoring”, have kept the original idea of ​​voluntary membership for the category of large companies, but the top 100 are now covered by individual surveillance programs. (5)

As you read this, ask me to ask you: Why is our Treasury no longer making noise, why is it not boasting, simply because it is doing a good job, simply adapting to international best practice?

Perhaps this is a matter of interpretation of what alignment means. Do we really want or do it this way, let it not be said that we also did not try, especially since we also have “partnership agreement with the Austrian tax administration” – as written in the invitation to the taxpayer?

The first question mark appears even about this invited taxpayer. Who is he? We learn that only those who “they have a system of procedures and control over the payment of taxes and fees to the state budget, they have appropriate fiscal behavior, they are not part of a fiscal group and do not have complex activities“. Well… a simple question: What does a business look like, and a big one, not a complex one? What does this taxpayer have to do to deserve his partner, ANAF, telling him, congratulations, you have a simple activity, very simple indeed! (Regarding the tax group – it has been proven once again how much the tax group is rooting for this object, which, again, is ordinary on the outside, but was so hard torn out of our business environment two years ago).

And let’s assume that this categorization will be valid. But at the end of the day, what are you interested in as a tax professional – keeping the complex ones close or the simpler ones? Next: Is it in your best interest to tell them clearly from the start what you want from them, or to leave them in the dark? This is a natural question if you see how the application to be filled out (simple) by the applicant begins: »Do you have a system in place to control tax arrears and fees to the state budget? Yes No. If you do not, you will not need to complete the application further as you are not eligible for the pilot program“.

I have also read how taxpayers from other countries are unsure what to do if they receive an invitation to partner. Even those who are happy with their current relationship with the inspector are, of course, surprised What will happen to me if I do not accept the invitation? (6)

But let’s now imagine the dilemma of a Romanian taxpayer who takes the case and submits an inquiry: if he ticks “NO”…does he have a job? If they check “YES” … and if what I have is bad, it doesn’t say anywhere what the internal control system should look like.

It would be more normal for the administration, happy that it at least has willing people, to say: look if you’re in the program we’re building this system together, make it look like this because I need your system so I don’t catch you for not having something like this. Again, help the taxpayer overcome his inherent fears because he willingly puts all his cards on the table, he comes in and says, look, I’m going to do this transaction, I’m going to make this decision, and you, the Fisc, can tell him in real time whether you agree with him or not. Just think of the advantage you have as an IRS, you no longer have to collect information 2.3-5 years after the transaction when you go for an after the fact audit!

Just because it’s a new game, what’s the point of raising by telling your partner “the horizontal monitoring pilot program applies only to income tax and value added tax and is a real-time control of the financial year, consisting of 4 fiscal control actions, which are carried out after the end of each quarter“. We read and re-read. Whatever it is, whatever you do, you get four checks a year in one fell swoop! What will the Romanian taxpayer say if he hears that the Dutch write only that much”the tax administration adapts the form and intensity of supervision to the quality of internal control, internal and external audit“. (7)

Where is our trust? This is exactly what is said in the contract between the parties: “The competent central tax authority and the taxpayer work together based on cooperation, transparency and mutual trust to achieve correct and timely tax compliance“.

And by the way, where’s the deal? As if there was a triad trust, transparency and mutual understanding! This is how I came across any reference to affiliate programs, be it Dutch, Austrian or Australian, Bulgarian or Polish. “Mutual understanding – means knowing the positions and interests of both parties. Mutual understanding involves the conscious cooperation of the parties in common interests, which is the correct fulfillment of obligations.” – writes on the website of the Tax Service of Poland (here, about the experience of the pilot program).

Why does our people avoid mentioning at least one date of “understanding”?! And maybe that too understanding be read, with suspicion, and how the arrangement is perhaps hidden? But isn’t the same suspicion hovering over the Dutch, Austrians, Bulgarians or Poles? Without shying away from words, you eliminate suspicions!

Apparently, ANAF has an excuse for this lack of understanding – this is what is required of the political elite. How do you write about your understanding of a (big) tax payer when the subliminal message is that he should be treated with a presumption of guilt (which is why they put such a consistent minimum tax on him, right?)?

But I come and say like last summer (8) let us, taxpayers, understand with understanding that these people are under a lot of pressure from the tax office. But they also, the Fisc people, need to understand that they have to fight for their clients, protect their needs for clarity and fiscal security.

Dear ANAF partners, do not give in to the temptation to ask the client to dig into a pile of papers just because necessary, or throw offensive norms and interpretations into the dark, based on the principle that you did not make the law unclear! No matter how much we fantasize while listening to the campaign soundbite, miracles will not come with some technical tools otherwise necessary, such as the government cloud or e-invoicing (9). Not some instruments pay taxes, not some instruments provide voluntary performance. If we do not understand this, then (and) this spring … it is just a copy! _

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