Tax evasion in Romania has a safe future

We can rest assured, tax evasion in Romania has a safe future: according to tax authorities, our children are already great tax dodgers!

Anywhere in the world, such a blunder would have ended in several dismissals! But this is not the case in a country where the revenue office claims that, out of the RON42 that children receive monthly as state allowance, they are to pay back RON 39!???

The local Revenue Office of Arges has sent notifications, by which they announced almost 11,000 children in their county, including disabled minors, that they have to pay overdue contributions to the public health insurance system, because of the allowances they receive from the state. This news has circled around all news channels of our country in the first week of 2015 and it has also been a delight for the press abroad!

Tax authorities of Arges consider that child allowances are income, so they have to pay a health insurance!

The representative of the tax authority are looking in vain for excuses, when they say that it is the fault of the software, which identified the children as being indebted to the state and that tax assessments have been generated due to the operation of software issued by the General Service for Information Technology of the National Agency of Tax Administration (ANAF). This allegation comes after they initiallytried to explain that this is a tax on bank interest that has been generated due to the fact that child allowances have not been taken from bank accounts in 2012. Please communicate to me the name of the bank that grants such an interest, given that the 16% tax amounts to RON 39, which means that the annual interest is of RON 234.75, for monthly deposits of 42 RON! Please take your time if you want to make a list of such banks!

The local press of Alba has informed that several parents have received at home overdue notices from the Revenue Office, for the payment of arrears related to their minors, whereas notices referred to income obtained in 2012 from “investments” as well as to health insurance contributions.

While the Romanian state treats this way its citizens and their children, let us see the policiesof other states from Europe on the subject of child allowance that is granted by the state.

The simplest version in the EU is the establishment of a uniform amount for each of the first two children, with a slight increase for the next. Examples are Germany (with 184 euro for the first two children, then 190 euro, followed by 215 euro) and Ireland (140 euro and then 148 euro).

Outsidethe EU, Norway follows a unitary value of 129 euro plus an additional allowance of 42 euro for Nordic regions.

There is also a variant preserving the principle of equality, yet benefits are differentiated according to the age of the child.

For example, in Denmark there are granted 145 euro for children between 0 and 3 years old, 131 euro for those between 3 and 7 years old and 103 euro for those between 7 and 18 years old.

In return, children of Holland receive a higher allowance when they grow older, starting from 58 euro when under 6 years old, 70 euro between 6 and 11 and 82 euro between 12 and 17.

Most of the states follow an increase of benefits for children, some of them with quite sharp curves.

Belgium grants 77 euro monthly for the first child, 143 euro for the second and 212 euro for the third and the following. Finland observessocial protection principles even in greater detail, by paying100 euro for the first child, 110 euro for the second, 131 euro for the third, 151 euro for the fourth and 172 euro for each of the following (the allowance is to be granted for all children and the difference is the one booked as additional amount of money).

An exception makes Great Britain, which opted for a decrease of benefits in case a family has several children (105 euro for the first child and 70 euros for each of the next children).

Interestingly enough, France does not grant any allowance for the first child of a family, although it pays quite high amounts for the second (approximately 120 euro per month) and the third child (approximately 155 euro per month). This suggests that the state encourages birth rate only from the point when the population level is recovered and not necessarily under any conditions (statistics indicate that 2.1 children per family are necessary in order to maintain the population level).

The only country where the amounts granted by the state for children depend on family income is Italy. Support is very consistent if parents gain under 1,000 euro / month (250 euro monthly for each child), it drops under 40 euro monthly for family income of up to 2,500 euro per month and it disappears above this margin (amounts stem from the approximate conversion of annual gains).

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