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Performance Report of A.N.A.F. 2

Message of the A.N.A.F. President

The year 2007, year of the integration of Romania in the European Union, is also the first year of the ANAF medium-term Strategy: that is why, the Performance Report on 2007 is the symbol not only of the achievement of the strategic objectives planned for this year, but also of with their adapting to the European Union requests on the tax administration. The main values representing the aiming stakes of the Strategy - stimulation of the taxpayers voluntary compliance with the fiscal discipline by providing to them modern services and simplified procedures, the control of the fiscal evasion in order to ensure a healthy business environment, assurance of an effective and efficient relationship, from costs point of view, of A.N.A.F. with the taxpayers - are implemented through the activity of the entire tax administration, developed during the last year.

For A.N.A.F., the year 2007 is a year of success: the strategic objectives drove our decisions, and the action lines planned ensured the concrete implementation of each of the options chosen when we drafted our program for the future. We have measured the progress obtained and we have found that our results are very good: regarding the objective of increasing the quality of our services and relationship for/with the taxpayers, we have the satisfaction to find that the online submission of returns is no more only an objective, but became a reality, as they are also the e-payment of taxes using the remote transmission means, the payment in a sole collection account and the simplified customs procedures. Meanwhile, we succeeded to release in real time the fiscal registration certificate, by diminishing the related processing time, to diminish the V.A.T. reimbursement and the excise duty return periods. We paid great attention to our activities which ensure the identification and collection of the amounts unlawfully eluded from payment by the taxpayers who did not observe the fiscal discipline - our goal being not only to collect more funds for the state budget, but also to ensure the conditions required to exist a competitor business environment offering equal opportunities to all the competitors: all of us must be equally treated and enjoy of an equal enforcement of the provisions of fiscal law! The Romanian Customs operated from the first moment of the integration according to the regulations applicable to all the European Union Member States. The year 2007 meant an ongoing focusing on the necessary simplifications to be brought to the customs procedures. The fiscal control, involving in the general effort to increase the tax administration activity quality and the taxpayer voluntary compliance with the fiscal discipline, continued its fight against the fiscal evasion, aiming especially the large evasionists and by this, contributing significantly to the increase of the fiscal discipline. Our efforts did not remain without results: the incomes collected by ANAF exceeded the level recorded in 2006 by about 20% (much more over the inflation rate and the economical growth cumulated), and our commitment, already represented, to increase the collection by 1 pp of GDP, was exceeded: the increase obtained by was of 1.56 pp. The greater was our performance the more significant were the challenges dealt with: following the legislative modifications, in the first trimester, the amount of V.A.T. decreased significantly, the amount of

3Introduction

the customs duties, following our accession to the European Union, decreased by 36% compared to the amount of the previous year, and the total amount of the social security contributions decreased by 2%. In this context, the budgetary revenues collected by A.N.A.F. have been in amount of RON 116,406.7 million, exceeding by RON 19,736 million the amount collected in 2006. We think that our objective was fulfilled extremely satisfactory. We undertook great efforts to decrease the costs for the tax administration by increasing the productivity and by a better administration of the public funds, due to the ongoing improvement of the services provided to our clients - the taxpayers - with whom we want to have from now on a partnership. Our joint efforts contributed to the change of A.N.A.F. into a modern administration and to our good results, presented in this Report. As I already declared in the Communication Strategy drafted by the end of the last year, the employees are the true, credible and positive ambassadors of A.N.A.F. On the work of our employees we relay our plans for the future. The A.N.A.F. performance objectives for 2008 are, ongoing, ambitious and because of that, with power of mobilization for the local structures. The goals established, sometimes at their maximum level (100%), must represent a challenge for A.N.A.F., for the manner in which it uses its resources. Our resources are not very generous, as we know already, but a better management does not mean necessarily more resources: it means a better organization! And 2008 shall be the year of many changes in this regard. Daniel Chiţoiu President of A.N.A.F.


MMMooottttttooo:::

Citizens have the obligation to contribute, through their taxes and duties, to the public expenses...

The Constitution of Romania, art. 555333

5Introduction

A.N.A.F. extended, step by step, its competences 2004: - undertaken under its administration the social security budget contributions 2005: - taking over of A.N.V. (National Customs Agency) and G.F. (Financial Guard) 2006: - extend of the competences of D.G.A.M.C.*; - the first structure for the administration of the medium-sized taxpayers of DGFP (General Directorate of Public Finances) of Bucharest 2007: - establishment of A.F.P. (Financial Administrations) for the medium-sized taxpayers; - subordination under A.N.A.F. management of the entire activity of the D.G.F.P. (including the activity of the treasuries). Note: * General Directorate for Administration of Large Taxpayers

l. INTRODUCTION

1. A.N.A.F. – a fiscal agency in development A.N.A.F. began to function in 2004 The National Agency for Fiscal Administration (A.N.A.F.) has been established by the Government Ordinance no 86/2003, of 1st October 2003 and became operational starting with January 2004, by the Government Decision no 1574/2003, which established the organizational structure of the Agency both at central level and local level. A.N.A.F. incorporated on the structure and responsibilities of the Department of Revenue Administration, by separating it from the Ministry of Public Finances.

The A.N.A.F. relationship with the Ministry of Economy and Finance is subordination one - the president of A.N.A.F. being the secondary credit coordinator. This position grants him a relative independence, expressed in the organization and direct coordination of the local units, the planning and execution of the own budget, the distribution and follow up of the local unit budgets (the executive managers of the D.G.F.P.s are tertiary credit coordinators). The administration of the budgetary revenues by a public specialized entity reflects by one side, the political option to separate the two opposite functions - cashing of the revenues and budget execution - in order to ensure their

independency. On the other side, the separation of the two wide fields aims the increase of the efficiency, this being a practice met in other community states also which have now reference tax administrations within the European Union. By its activity, A.N.A.F. applies the principle from

the Constitution according to which all the citizens must contribute to the support of the public expenses, each of them according its economical capacity. A.N.A.F. administers taxes, consumption duties, customs duties and other budgetary revenues and, starting with the year 2005, the social security budget contributions, too. All these represent the sources of revenues for the general consolidated budget (excluding the local budgets). These revenues cover the public domestic expenses and the contribution of Romania to the European Union budget. The tax administration activity is complete and integrated because covers the following wide fields:

• the taxpayers assistance and guidance; • the fiscal registration; • the determination and statement of the

taxes, duties, contributions and other amounts due to the general consolidated budget;

• drafting of the fiscal registration and statement procedures;

• collection of the revenues; • verification of the correctness of the

taxable income statements and tax, duty and social security contribution payments;

• verification to the purpose of controlling the fiscal fraud and evasion;

Severability of the responsibilities 1. M.F.P. (Ministry of Public Finances) – drafting of the

budgetary and fiscal policy 2. A.N.A.F. (National Agency for Fiscal Administration) –

drafting and enforcement of the tax administration policy


• settlement of the contestations received from the taxpayers;

• interinstitutional cooperation, at internal and external level, to ensure an efficient information exchange in order to undertake a coordinated control of the fiscal fraud.

In 2005, A.N.A.F. took over in its subordination the Financial Guard (G.F.) and the National Customs Authority (A.N.V.), obtaining in this way a unitary and efficient fiscal control core and a better coordination of the activities leading to the diminishing of the fiscal evasion.

Current organization and management of A.N.A.F. A.N.A.F. management is built of one President, three Vice-Presidents - who coordinate the activity of administration, fiscal control and customs - and a General Commissioner - who is the chief of the Financial Guard.

The Agency is organized as a network: a central structure and local structures. The tax administration is built up of 21 central directorates (on first level): 42 D.G.F.P.s (on second level), 41 financial administrations for the medium-sized taxpayers within the county directorates and 368 financial administrations (on third level) at level of municipalities, cities and communes. The National Customs Authority has a central structure, 8 regional directorates, 42 county directorates and 45 customs offices. The Financial Guard has a central structure, 41 county sections and the section of Bucharest Municipality.

Human Resources In present, A.N.A.F. has a number of de 30,162 employees, out of which 24,903 work in the tax administration, 3,934 within A.N.V. and 1,325 within the Financial Guard. Out of the total employees, two thirds are women. The personnel with high education represent 70% of the total personnel, the most of them having economical education and less of them, judicial education or other qualifications. The age average of the employees is low: the personnel aged between 35 and 45 years representing 60% of the total. A.N.A.F. activity scope The tax administration has registered and administers over 8 million of taxpayers (out of which 1.5 million are legal persons) and processes annually 20 million of taxable income statements. A.N.A.F. governing principles The axes with priority of the A.N.A.F. activity determine the development directions of the fiscal administration policy which is the general framework for the strategic objectives: • encouragement of the voluntary

compliance of the taxpayers with the fiscal discipline;

• repression of the fiscal fraud; • quick and efficient collection of the

budgetary obligations. In order to meet these objectives, A.N.A.F. chose to implement a number of new values: • increased transparency • taxpayers equal treatment • high quality relationship with the

citizens and services adapted to their requests

• professionalism and correctness in the relationship with the taxpayers

• personnel involvement in meeting of, and adhesion to, the Agency objectives.

7Introduction

A.N.A.F. organization in 2007

MINISTRY OF ECONOMY AND FINANCE

A.N.A.F. President

Directorates of the central structure of

A.N.A.F.

Financial Guard 41 county sections 1 section in Bucharest

National Customs Authority

8 regional directorates 42 county directorates 45 customs offices

42 DGFP, out of which: 41 county directorates 1 –Bucharest

42 AFP – for medium-sized taxpayers; 368 AFP -municipalities, cities, communes and Bucharest 1st - 6th districts

1st Vice-President

2nd Vice-President General Inspector

1st General Secretary


2. A.N.A.F. in 2007, brief presentation 2.1. A.N.A.F. in 2007, brief presentation expressed in figures

About A.N.A.F.

Total number of employees 30.162 - Tax administration

o central structure o local structures

24.903 958 23.945

- A.N.V. 3.934 - Financial Guard 1.325 - out of the employees' total number,

o women o men

64%36%

Local structures - Tax administration 42 County D.G.F.P.s and Bucharest DGFP, 41 AFPs for

medium-sized taxpayers, 368 AFPs and one tax administration unit for the large taxpayers

- A.N.V. 8 regional directorates, 42 county directorates, 45 customs offices

- Financial Guard 41 county sections and in Bucharest Number of administered taxpayers Total, out of which: over 8 million taxpayersLarge taxpayers 994Medium-sized taxpayers 9.078

Results obtained Budgetary revenues collected - total RON 116,406.73 millionsout of which: recovered receivables RON 31,675.1 millionsout of which: by forced execution RON 11,339.0 millions- debts recovered following the initiation of the insolvency procedure RON 2330.2 millionsNumber of verified economical agents - fiscal control 103,503- Financial Guard 173,350

Assistance activity Number of letters with answers 44,455Phone calls 1,346,100Number of processed taxable income statements 20 millionsVoluntary compliance rate - at statement 81%- at payment - numerical - at payment - value

79%71%

Results of the verification of the activity of the taxpayers - Fiscal control RON 2,588.143 millions- Financial Guard RON 1776.8 millions

9Introduction

Development of the revenues brought to the budget, as weight in G.D.P., in 2007 Commitment: + 1 p.p. Achieved: + 1.56 p.p.

2.2. Strategic objectives Implementation

Successful actions in 2007

The fulfillment of the strategic objectives was possible by implementing in practice the specific action lines

both at central and local level. The significant results registered in 2007 involved all the large activity

domains of A.N.A.F.:

o Immediate release of the fiscal registration certificate

o Diminishing of the duration of releasing the Certificate of Obligation

o Extend of the taxable income statements' online submission

o Payment in a sole fiscal obligation account

o Pilot Center for centralized printing of the documents

o Data Storage and Recovery Center in case of disasters

o Sole database DATA WAREHOUSE

o Extend of A.N.A.F. competences by subordinating the entire activity of the county

general directorates of public finances

o The procedure for the simplified customs statement

o The procedure of customs formalities clearance at domicile

o A.N.V. undertaking of the excisable product movements.

o A.N.A.F. Medium-Term Strategy and its public launching

o A.N.A.F. Communication

Strategy

o Reorganization of A.N.A.F.:

• Organization of its own

information technology activity

• Extend at the level of the entire country of the specialized administration of the

medium-sized taxpayers having the fiscal residence on the county territories

• Establishment of the Strategic Planning Directorate for monitoring of the local

activity, of the Fiscal Information Directorate and of Fiscal Procedure Commission

o Establishment of the premises for the implementation of the objective: “ANAF

registered office”

o Administration of the taxes of the natural persons based on a centralized

architecture. As a supreme result of the implementation of its objectives, A.N.A.F. binds to increase by 1p.p. the weight

of the budgetary revenues collected in the G.D.P.. This commitment has been exceeded by 0.56 p.p.: the

budgetary revenues collected by A.N.A.F. represented in 2007 29.79% of G.D.P. (compared to 28.23% in

2006).

I Tax administration 10

I. TAX ADMINISTRATION


The budget inflows cashed by A.N.A.F. has increased in 2007 compared to 2006. And this increase is significant, both in real terms and as share of the G.D.P. The strengthening of the fiscal civism is an achievement of our effort to facilitate the fulfillment of the fiscal obligations by the tax payers. modern services, simplified procedures, better assistance. The year 2007 is a reference year for the simplification and modernization of the procedures - informatization being the key word of the increase of the transparency - informing on regular basis of the public on the achievements and future commitments of A.N.A.F., on the better and timely assistance - an informed taxpayer is a tax payer potentially correct! We have made great efforts, and the tax payers recompensed us accordingly. The successes obtained are mainly the result of their fiscal discipline. The voluntary compliance has increased the most of the tax payers declared and paid correctly and timely! Certainly, the debtors have not been forgotten, either; the cashing of the receivable was enhanced, the cashing by forced execution was strengthened and ultimately, the procedure of insolvency was initiated. To create a new type of relationship with the taxpayers in view of increasing the voluntary compliance remains further the main concern of A.N.A.F., because it is also the more efficient for both parties. Eugen Ciorici Vice-President of A.N.A.F.

On this reporting moment, we are glad to confirm that A.N.A.F. continues to have significant successes in the control of the fiscal evasion. The acts of our inspectors led to remarkable results, the additional amounts established following the inspections on-site amounting in 2007 to over 2,588 million lei. The control of the fiscal evasion is one of the prioritizing axis of A.N.A.F., of great significance in order to ensure a healthy business environment, within the economical agents should compete each-other from equal positions: the tax payer which does not pay taxes enters on the market with the advantage of costs artificially diminished, competing in this way unfairly the correct tax payer which paid its taxes. The more complex and diversified is the economic activity, the more are the possibilities of fiscal evasion and the more ingenious is the operating method. Consequently, the fiscal control must modernize and adapt to the new realities. That is why, in the last year, efforts focused on the creation of the premises for the electronic control and the control of the multinational fraud by transfer prices (control methodology, practical guidance, personnel training) have been made. The fiscal investigative activity was developed, the use of the risk analysis was improved and extended, so that not only the control efficiency shall increase, but also the fair taxpayers, related to which there is no fraud risk, shall not be any more stressed by useless inspections. Bogdan Huţucă Vice-President of A.N.A.F.


I.1. A.N.A.F. MODERNIZATION

1.2 Organizational reform of the fiscal administration

A.N.A.F. organizing and reorganizing - adaptation to the increasingly competences The A.N.A.F. organizational reform shows the adaptation of the institute to the development of the economical context and to task of collecting in better and better conditions the budget inflows. By the other side, the changes aim the implementation of the community principles regarding the transparency of the management act, the decentralization of decision-making and the consolidation of the structure necessary to control the corruption facts. From its incorporation, A.N.A.F. passed by many stages of organizational improvement, which was adaptation necessary in order to ensure the correspondence between the extend of its competences and the organizing manner. From this point of view, the year 2007 brought a number of very important modifications:

• subordination of the entire activity of all the General Directorates under the A.N.A.F. management;

• specialized administration on tax payer categories, whose contribution to the budget inflows is significant, continued in 2007 by extending the determination of the category of medium tax payers at the level of the entire country;

• incorporation of new organizational structures (I.T., strategic planning, elaboration and enforcement of the tax legislation and procedures, fiscal information, general inspection - autonomic structure for the internal activity control and the A.N.A.F., including the Financial Guard and the Romanian National Customs Authority, corruption control).

Now, A.N.A.F. administers separately not only the large taxpayers but also the medium ones.

In order to improve the activity of collecting the taxes to the budget, the specialized administration was extended: • starting with July 2006, the large taxpayers

on the entire territory of the country are administered by a sole tax body which is the General Directorate for administering the large taxpayers;

• staring with 1st July 2006 the first structure for administering the medium tax payers was also organized at the General Directorate for Public Finances of Bucharest;

• starting with April 2007, public finance administrations for the medium tax payers have been incorporated at the level of all the general directorates of the county public finances.

On 31.12.2007, A.N.A.F. administered a number of 994 large taxpayers and 9078 medium tax payers, out of which 677 at the General Directorate of Public Finances of Bucharest and 8401 at the County General Directorate of Public Finances.

A successful reorganization is an investment for future


The organizational reform of ANAF involved in 2007 also the local directorates allowing in this manner to be solved the doubts on the double subordination, existing between 2004 and 2006. The subordination under A.N.A.F. management of all the local structures led to the homogenization of the management practices, a better establishment of the responsibilities, and generated advantageous conditions for the

development of efficient and better coordinated control acts. This involved both the adaptation of the organizational structure to the strategic objectives of A.N.A.F., mainly in the regard of the increase of the efficiency of tax collection, and the enforcement of the community recommendations in this field.

Annual meeting to analyze A.N.A.F. activity


The multiple access in the relationship with the fiscal administration - a facility for the taxpayers

1.3. 1.3. A fiscal administration focused on

the services provided to the taxpayers The taxpayer - privileged partner

1.3.1. Tax payers assistance and guidance The activities to assist and guide the taxpayers formed one of the lever by which ANAF acted between 2005 and 2007 to improve the voluntary compliance. The Romanian National Agency for Fiscal Administration always aimed a better relationship with the taxpayers by providing accurate and prompt answers to the questions addressed by them, as well as the adaptation of the services to the requests of the taxpayers, so that the tax obligations may be fulfilled easier and in optimal conditions. To the purpose of reaching the objectives regarding the observance of the obligations to declare the incomes and to pay on time the related taxes, three directions to promote the fiscal civism have been adopted:

providing of clear information adapted to each category of tax payers;

providing of programs, fiscal legislation and information which may be downloaded for free;

development of the multiple access of the taxpayers within the relationship with the tax administration direct, by mail, then electronic, and starting with 2007, remote access.

Multiple access development at the cash desk, by mail, by e-mail, by phone

Written correspondence („the letters received from the tax payers”) continues to be numeruous: 44,455 letters settled in 2007. The experts responding to the questions regarding the understanding and the enforcement of the fiscal legislation aimed to express answers well argued and to satisfy the information necessity of the tax payers.

In connection to the applications by e-mail received from the taxpayers, it was aimed the settlement in an as short as possible time, by transmitting in the same day of the requested answers. For the enforcement of the sending/receiving system by mail of the income statements,

annually are sent to the taxpayers, natural persons, the envelopes containing both the income statement forms and the guidelines for their completion. Development of the Call Center for Assistance The activity of the Call center for Assistance in Bucharest, incorporated in 2006, consists of providing by phone the fiscal information of any type in a sole location. This activity is continually monitored In 2007, it was initiated the establishment of 5 such call centers for the local assistance, following that in 2008, these became operational. In order to provide specialized services within the personalized assistance, a special procedure shall be drawn up, establishing strict access rules so that to be ensured the confidentiality of the information provided.

The computerized assistance of the tax payers -General Directorate of Public Finances of Brasov

15Raportul de activitate al A.N.A.F.

Improvement of the A.N.A.F. portal The portal ergonomy was reviewed in order to take into consideration the expectations of the users: modern graphic, improved navigation, new functions and increased legibility. The questions received from the tax payers and the related answers the most frequent are posted on the site there are also posted the legislative novelties, free-of-charge programs, tax legislation and other useful information www.mfinante.ro , A.N.A.F. portal). The selection and systematization of the most frequent solutions, with a high general enforcement level, have been initiated, being then published on the A.N.A.F. portal (the "Frequent questions" module) in order to become available both for the local assistance structures and for the tax payers. Different informative materials have been elaborated and published on the A.N.A.F. Portal to support the tax payers:: - The Tax Guidelines for the authorized natural persons; - The Handbook for the submission of the incomes statements on Internet, in collaboration with the General Direction for Information Technology The assistance and guiding activity recorded remarkable results

Within the written assistance, in 2007 answers have been formulated and solutions have been

transmitted for 44,455 letters regarding the issues raised by the tax payers, compared to 40,182 letters in 2006. Within the informatized assistance, in 2007 8,053 answers

have been transmitted by e-mail to the tax payers, compared to 5,047 in 2006. Also, in 2007 1,346,100 phone calls have been received, compared to 778,600 in 2006. An increase of the interest of the tax payers to obtain the needed information using the quick and easy assistance methods (e-mail and phone call) has been found.

For the enforcement of the sending/receiving system by mail of the income statements in 2006, annually have been sent to the tax payers, natural persons 510,154 envelopes, containing both the income statement forms and the guidelines for their completion.

Assistance for the tax payers*

2006 2007

2007/ 2006 (%)

Number of settled letters 40.182

44.455 111

Number of settled e-mails 5.047

8.053 160

Number of phone calls 778.637

870.293 112

* cumulated: at local and central level. The first poll carried out by A.N.A.F. In year 2007, A.N.A.F. carried out for the first time the trimestrial polls on the perception of the citizens related to the tax administration:

- The following domains have been taken into consideration;

- the reason of the coming to the Tax Administration;

- the opinion about the Administration organization;

- the satisfaction given by the answer received to his/her issue;

- the quality of the provided services. The pool results are good, but improvable: 75% of the tax payers are satisfied by the consultancy

The computerized assistance - General Directorate of Public Finances of Brasov

Assistance by phone - General Directorate of Public Finances of Brasov

16I Tax administration

granted, 68% think that the employees were polite, 51% are convinced that our services shall further improve. To know the citizen opinions is of great value for the A.N.A.F. management in the decision making process, especially those decisions related to the assistance and services providing activities. The poll allows to know the expectations of the tax payers regarding to the administration:

a more accessible administration; easier procedures; necessity of a relationship as

personalized as possible. Development of the external communication The personnel of the assistance compartments went to t he employers in order to clarify some fiscal issues. Meanwhile, radio and TV. broadcast of current fiscal themes have been realized. Press briefs and releases have been elaborated and broadcast, interviews have been given within the news broadcast of the main TV channels and radio channels in order to inform the tax payers about the concrete methods to fulfill their fiscal obligations, meanwhile observing the lawful terms.

Press conferences - a direct relationship with the mass media

17Raportul de activitate al A.N.A.F.

1.3.2. Simplified and modernized

fiscal procedures The simplification of the procedures, following the enforcement of the sole tax rate starting with 1 January 2005, has continued to be a concern for A.N.A.F. The fiscal administration procedures have been adapted also because of the accession of Romania to the European Union, as consequence of the necessity to ensure the intercommunity information exchange on the value added tax and the excise duties. In the domain of the fiscal registration The coming into force of the new regulations, starting with 1 January 2007, measures have been taken in the activity of fiscal registration of the tax payers. During 2007 it has been regulated the procedure for the change of the tax residence, too. The procedure for application for/issuance of the tax residence certificate to the purpose of collecting V.A.T. has been approved. The fiscal administration issues this certificate in 24 hours. Submission of the taxable incomes statements by electronic remote transmission means The on line de submission method of the taxable incomes statements was enforced step by step, as an alternative method to declare the taxes, duties and contributions. The implementation stages of the electronic submission have been the following: 1. in 2004, for the large tax payers 2. in 2007, the extend accelerated: - starting with 15 April 2007 - to the legal persons from Brasov and Ilfov; - starting with 15 September 2007, to 10 counties (Bacău, Bihor, Braşov, Brăila, Cluj, Iaşi, Olt, Sibiu, Timiş şi Vâlcea).

In 2008, on line, submission shall be generalized step by step to all the tax payers all over the country. Submission of the taxable incomes statements by electronic remote transmission means presents major advantages: o decongestion of the tax unit headquarters, being avoided the physical presence of the tax payers there and, in this manner, being diminished the time spent by these ones to submit their taxable incomes statements; o diminishing of the resources involved in the management process and of the statement processing time. The implementation of this method contributed significantly to the elimination of the errors

meanwhile with the diminishing

of the statement

data processing difficulties and the potential corruption phenomena. Taking into consideration the advantages provided by the on line taxable incomes statements submission, in 2008, this method shall be extended at the level of the entire country and for all the tax payer categories.

Payment of the tax obligations in a sole account

In 2007, the payment of the tax obligations in a sole account was implemented. The method was implemented step by step In a first stage, starting with 1 October 2007, only for the tax payers meeting cumulatively three conditions:

o does not record tax obligations not paid on the date of paying the relevant taxes in the sole account;

o submit the taxable incomes statements in due term;

o make the payment timely and of the entire due amounts of their tax obligations.

In 2008, the method has been generalized for all the tax payers all over the country.

Payment in a sole account - a facility for the economical agents

The taxable incomes statements submitted online, a symbol of the A.N.A.F. modernization

The certificate of tax residence to the purpose of collecting V.A.T. is issued in 24 hours


The faster settlement of the negative V.A.T. balances by eliminating some activity categories from the category of those with high fiscal risk.

Currently, the fiscal record certificate is issued instantly

Simplification of excise duty return procedure

New terms for VAT refund subsequent fiscal control: - large and medium taxpayers - 2 years; - small risk refunds - 30 days.

Improvement of the income tax administration procedures The completion of a central database allowed in 2007 the improvement of the income fiscal administration procedures: • the taxable incomes statements and the taxation rules for the establishment of the advanced payments have been unified • it was obtained a sole regulation to regulate all the taxable incomes statements and the other documents necessary in income tax administration. Modification of the V.A.T. and related form administration procedures The procedure for the settlement of the added tax value return applications of the taxable persons not registered to the V.A.T. purpose in Romania, resident of another EU Member State, and the procedure for the settlement of the added tax value return applications of the taxable persons not registered to the V.A.T. purpose in Romania, resident of non-EU Member State, have been regulated. The tax body competent to administrate the diplomatic missions, consular posts, legal person foreign organisation representatives, having the headquarters or developing its activities on the territory of the Bucharest Municipality, has been established.

Modifications of the methodology to settled the V.A.T. return applications

The V.A.T. return applications, submitted by the taxable persons developing export activities starting with 1 January 2008 and for the medium taxpayers, are settled faster starting with 2007 because the fiscal control is carried out subsequently. Cases representing high fiscal risk are excepted. In order to increase the rapidity of V.A.T. return, the following have been eliminated from the category of high fiscal risk:

• the activities for which the simplification measures are applied (wooden material, waste);

• the case in which there are negative V.A.T. balances with return option submitted in the previous years and not yet settled; the case in which the taxable person presents, during 3 consecutive periods, negative V.A.T. balances exceeding RON 100,000 and do not request return. In order to refund V.A.T. faster in case of the large tax payers and, starting with 1 January 2008, in case of medium taxpayers, too, modifications of the framing conditions in the category with high fiscal risk have been made and the term for carrying out subsequent fiscal inspections was modified, as it follows: Simplification of excise duty return procedure The legal provisions related the movement of the products taxable by excise duty in suspensive régime have been made compliant with the community provisions and the excise duty return procedure for the excise duties paid by the users of the products taxable by the harmonized excise duties for which an indirect exemption is granted has been regulated.

In the domain of fiscal record certificate

The fiscal record

certificate is issued

instantly, in the presence of the taxpayer or of his/her/it representative. The Romanian National Office of the Trade Register requests and receives, in electronic template, from the Romanian National Agency for Fiscal Administration, the information from the fiscal record certificate without being necessary to request these taxpayers to undertake the necessary steps in order to obtain from the competent tax bodies such certificates.


I.2. COLLECTION OF THE BUDGETARY REVENUES

2.1. A faster and more efficient collection

The budgetary revenues collected by A.N.A.F. in 2007, in amount of RON 116,406.66, continued their positive development of the last years, reflecting not only the positive development of the economical environment but also the improved activity of the tax administration. The rhythm of the increase of the budgetary revenues collected (20,42%), in nominal terms, was significant over the inflation cumulated rate (6,6%) and real economic growth rate (6,1%). The percentage of the budgetary revenues, collected by A.N.A.F, of the total general consolidated budget revenues was of 91.6% in 2007. The development of the budgetary revenues collected by A.N.A.F. To increase the amounts collected but also to ensure the equality of the taxpayers in front of the tax law as significant prerequisite for the improvement of the business environment, A.N.A.F. keeps further the abrogation of the payment facilities regulated by the Government Ordinance no 26/2005.

A.N.A.F. exceeded the commitment of the increase by 1 p.p. of the G.D.P., the budgetary revenues collected by it By the end of 2007, the weight in the gross domestic product of the budgetary revenues collected by the Romanian National Agency for Fiscal Administration was of 29.79%, by 1.56% greater compared to 2006 (28.23%), exceeding

by 0.56

percentage points (p.p) the commitment undertaken by ANAF in its Medium Term Strategy.

Budgetary revenues achieved

2004 2005 2006 2007

RON million 68.885,3 79.305,6 96.670,6 116.406,7 % of GDP 27,9 27,6 28,2 29,8% rhythm compared to that of the previous year

27 15 22 20

Budgetary revenues collected by ANAFmil. lei

79305,6

96670,6

68885,3

116406,7

2004 2005 2006 200727,0 27,6 28,2 29,8

Weight in GDP - %


Structure of the budgetary revenues on budget types The greatest weight in the total revenues collected by the Romanian National Agency for Fiscal Administration belongs to the state budget revenues (66%) and to the social security budget contributions (21%). o State budget The state budget revenues were in amount of RON 74,994.61 million; the nominal increase rate compared to 2006 was of 19.44%. The

increase obtained exceeded by about 1.p.p the state budget revenues increase rate obtained in the previous year (18.3% in 2006 compared to 2005). The main state budget revenue sources are the income tax, the value added tax and the excise duties. The most important contribution in forming the state budget revenues is brought by the V.A.T., with a weight of about 42%, followed by the income tax (18.5%) and the corporate income tax (14%). The biggest dynamic compared to the previous year was obtained for the income tax (42.3%) and the corporate income tax (33.2%). The cashing from excise duties increased by 18.1% while the budgetary revenues from V.A.T. had a relative low increase rate, although also positive (12.5%).

The development less favorable of the V.A.T. cashing rate was determined by the legislation modifications occurred starting with 1 January (namely, the renouncement to the V.A.T. payment in the customs offices). The reinforcement of the V.A.T. payment in the customs, starting with the second trimester as well as the strengthening of the control acts, led to the normalization of the situation during the last three trimesters of the year. The customs duties cashing decreased by 64%, as an effect of the accession of Romania to the European Union and the dissolution of the boundaries with the community countries. o Social contributions Although in 2007 the process of tax relaxation continued by the diminishing of the social security contribution rates by 2%, the revenues from social security contributions increased compared to 2006. The revenues collected to the Social Security Budget were in amount of RON 24,633.1 million, the revenues collected to the Health Fund were in amount of about RON 3,885 million, and those collected to the Unemployment Fund were of about RON 2,513 million. The greatest dynamics compared to the previous

year belongs to the revenues collected to the "Sole National Health Fund (21,7%) and to the Social Security Budget (21,3%).

The Unemployment Fund had an increase rate of 10.7%.

A.N.A.F. administers

- 994 - large taxpayers.

- 9078 medium-sized taxpayers

out of which, 677 through the

General Directorate of Public Finances of Mun. Bucharest

18298,2

14711,6

11861,9

0

5000

10000

15000

20000

2005 2006 2007

Arrears to be rocovered, mil. lei

Evolution of state bugdet's main taxes, mil lei

05.000

10.00015.00020.00025.00030.00035.000

Corpora

te tax

Incom

e tax

VAT

Excise

dutie

s

Custom

s duti

es

2006 2007


Weight in GDP of arrears to be recovered (%)

6,4%

4,3%

3%

2004

2005

2006

2007

2008

Specialized administration large and medium-sized taxpayers The separate administration of large and medium-sized taxpayers is justified by the big amount of revenues they brought to the budget, but also by the great level of their outstanding debts. In 2007, the total revenues cashed to the general consolidated budget from the large taxpayers amounted to RON 49,293.2 million, representing 42.8% of the total amount of the revenues collected from all the taxpayers, legal and natural persons, to the general consolidated budget. The total revenues collected from the medium-sized taxpayers in the same period amounted to RON 20,568.0 million, representing 17.9% of the revenues collected from all the taxpayers.

Thus, a number of 10,072 taxpayers, representing 0.1% of the total taxpayers administered by A.N.A.F., bring to the budget about 60% of the total annual budgetary revenues. Arrears recovery. Forced execution. he amounts collected from the budgetary recoverable receivables until 31 December 2007 amounted to RON 31,675.1 million, representing 62.6% of the total amount of the recoverable receivables, out of which, the amount collected from r receivables existing on 31.12.2006 was of RON 5,288.3 million and the amount collected from the receivables constituted during the fiscal year 2007, was of RON 26,386.8 million.

The arrears remained to be recovered to the general consolidated budget on 31.12.2007 were in total amount of RON 11,861.9 million, by 19.4% smaller than the arrears remained due on 31.12 and by 35.2% smaller than the arrears remained due on 31.12.2005.

Regarding the weight in the gross domestic product in 2007, the weight of the arrears remained to be recovered to the general consolidated budget on 31.12.2007, represented 3.0% compared to 4.3 on 31.12.2006 and to 6,4 % on 31.12.2005. In order to discourage the cumulating of budget receivables, ANAF updates and publishes on its own Internet home page, the list of the large taxpayers and the list of the medium and small taxpayers, debtors to the state budget, Social security budget, Health Fund and Unemployment Fund as well as the debt collection methods

enforced by the competent bodies.

o The recovery rate of the large and medium taxpayers' arrears is a positive one The ongoing concern to diminish the arrears, due by the large debtors, led to remarkable results by one side, the receivables existing in the balance are decreasing year by year. By the other side, the appearance rate of new arrears diminished So, the weight of the revenues from

recoverable arrears collected from the large and medium-sized taxpayers in the total arrears collected in 2007 was significant:

• about 36% from the large taxpayers, out of which 9.96% representing arrears existing in the balance of 2006 and collected in 2007 and 41.17% arrears constituted during 2007 and collected in the same year;

• about 18% from the medium taxpayers, out of which 24.5% representing arrears existing in the balance of 2006 and collected in 2007 and 16.4% arrears constituted during 2007 and collected in the same year. The total weight of the outstanding arrears on 31.12.2007 was of 14.90% for the medium-sized


taxpayers and of 12.94% for the large taxpayers. Strenghtening acts developed within the forced execution procedure

By the end of 2007, a number of 7,365

seizures have been instituted on real estate assets evaluated to RON 1,961.65 million.

Following the valuation of these assets, the total amount of RON 114.16 million was brought to the state general consolidated budget.

The effect of the institution of seizures on the real estate assets led to the immediate compliance of the debtors with the fiscal discipline, being collected to the state budget a total amount of RON 820.91 million, being relieved as result, a number of 1 006 seizures.

In the same period, 9 847 seizures have been instituted on the movable assets, evaluated to RON 253.04 million.

Following the sale of these assets, the total amount of RON 18.72 million was brought to the state general consolidated budget.

The effect of the institution of seizures on the movable assets led to the immediate compliance of the debtors with the fiscal discipline, being collected to the state budget a total amount of RON 652.80 million, being

relieved as result, a number of 1,916 seizures. Initiating the insolvency procedure (reorganization and bankruptcy) - last option for the tax collecting activity In case of taxpayers not stimulated by the forced execution measures undertaken against them to pay their outstanding debts to the state budget, the insolvency procedure, consisting of reorganization and bankruptcy, is initiated.

So, between 01.01. and 31.12.2007, 6 236 legal actions, 6 228 against small and medium taxpayers and 8 against the large taxpayers, have been filed and submitted to the competent courts, requesting a total amount of RON 2,841.94 million The amount collected during 2007 from the taxpayers against whom the insolvency procedure was initiated was of RON 2,330.18 million, amount which includes also the amounts collected following such legal actions initiated before 01.01.2007, not only in 2007.

Evolution of cashed budgetary revenues

62.787

20.311

2.27110.655

74.995

24.633

2.513

12.966

State Budget Social SecurityBudget

UnemloymentBudget

Health FundBudget

2006 2007


I.3. ASSURANCE OF EQUAL TREATMENT OF THE CITIZENS

Efficient control of fiscal evasion The fight against the fiscal evasion - prioritizing axis of the fiscal administration activity

To ensure the equality of the citizens in front of the taxation law and to keep a fair competitiveness among the economical agents, A.N.A.F. is always concerned by the diminishing of the fiscal evasion affecting the budgetary revenues and disturbing the business environment. So, in 2007, the number of fiscal inspections aiming the verification or determination, as the case may be, of the tax bases, the verification of the lawful and compliant nature of the taxable incomes statements, the correctness and accuracy of the taxpayers' tax payments, the observance of the tax and accounting laws' provisions, and the determination of the payment obligation differences and of their related accessories. The selection in view of carrying out fiscal inspections aimed mainly the taxpayers developing activities in the domains with a high fiscal risk.

In 2007, have been carried out 103,503 verifications out of which:

- 15,977 general fiscal inspections; - - 45,464 partial fiscal inspections; - 24. unexpected checks; - 5.411 cross checks;

- 12.174 on-site investigations.

Following the fiscal inspections carried out, additional amounts, cumulatively amounting to RON 2,588,143,306 which means 28% more than the previous year, have been collected to the general consolidated budget. Following the verifications carried out in 2007, appears that there domains where the fiscal fraud is more frequent or of a greater extend: construction of buildings and works of art; production of paints, finishing varnishes, print inks and mastics; solid, liquid and gas fuel and their derivative wholesale trade; cull and waste wholesale trade; production of raw ferrous metals and ferrous allies; retail trade in unspecialized stores where, mainly, food, beverage and tobacco are sold.

Fiscal evasion control, support for the business environment

Structure of amounts collected by type of tax and contribution

VAT52,3%

Corporate tax29,1%

Nonresidents income tax2,2%

Excise duties7,9%

Unemployment fund contribution

0,3%

Health fund contribution1,0%

Social securities contribution1,9%

Tax on small enterprises revenues

0,4%

Salary related taxes0,7%

Other taxes3,3%

Tax on dividends1,0%


The activities of thematic check-up shall be take over by the Financial Guard in order to allow a better focus of the fiscal control structures on the special control domains. Fiscal investigative activity The fiscal investigations developed an activity mainly methodological, creating the good work premises for the future The fiscal investigation is one of the activity recently developed by A.N.A.F. (the competent directorate was established at the middle of 2007), but of a great importance for the increase of the efficiency of the fiscal control, especially in the regard of a better selection of the taxpayers to be verified. The procedure and documentation related to the investigative-documentary activity have been elaborated resulting in the drawing up of the Guidelines for the Investigation and Control of the Intra-Community Operators, simultaneously with the training of the trainers of the personnel working in the special investigative-documentary activity on-site and control of the intra-community operators. In the regard of the information exchange with the other Member States on V.A.T., 185 information requests have been sent and 216 received. These information requests refer mainly on verifications of the suspect intra-community transactions made by Romanian taxpayers, registered as V.A.T. payers. Mutual assistance in collecting budgetary debts The analysis and settlement of the issues, related to the recovery of the fiscal debts established by debt securities issued in a Member State, as well as the recovery in the UE Member States of the fiscal debts established in Romania, represented a prioritarian concern in terms of compliance with the community regulations on this matter.

During 2007, a number of 302 recovering assistance requests, transmitted by the competent authorities of other EU Member States, have been received and analyzed.

Type of the requests received from the competent authorities of other

EU Member States

Request no

Information requests, out of which: 5

Information requests - natural persons 5

Notification requests, out of which: 61

Notification requests - natural persons 53

Notification requests - legal persons 8

Recovery requests, out of which: 236

Recovery requests - natural persons 196

Recovery requests - legal persons 40

Control of public funds' use in order to identify any financial indiscipline form. The financial control body within the General Directorate for Fiscal-Financial Inspections and the local control structures functioned in 2007 with a number of 241 inspectors. In 2007, the financial control bodies, from the central and local structures, carried out 8,028 inspection acts, out of which 346 to the public corporations, 422 to the national corporations and companies, 532 to the trading companies where the sole or majority shareholder is the State, and 6,728 to other economic agents. The financial control structures carried out or participated to financial-accounting verifications requested by the Ministry of the Interior and Administration bodies, by the National Directorate for Corruption Prevention, the Prosecutor's Office, the Auditors Court of


Romania, the Prime-Minister Cancellary, the Administration of the President of Romania and other State institutions. The results of the fiscal-financial inspections carried out in 2007 led to the establishment of certain differences for the general consolidated budget, in amount of RON 853,283 thousand and to the drawing up of a number of 1 034 contravention fines amounting to RON 565 thousand. The efficiency of the financial control has a positive development compared to 2006: the number of inspections carried out by a fiscal-financial inspector increased by 7%. In 2007 was verified the administration and management of the financial resources of the National Romanian Lottery, the economic agents recording losses during the period between 2004 and 2006, as well as the transfers, endorsement and use of the subsidies requested by the economic agents.

The headquarters of the General Directorate of Public Finances of Prahova


I.4. IMPROVEMENT OF THE A.N.A.F. FUNCTIONING

4.1. Improvement of the internal processes and coordination 4.1.1. Strategic planning A. ANAF Strategy for 2007-2011 – implementation of the objectives during the first year of the strategy In 2007, in May, A.N.A.F. publicly launched its first own Strategy. The establishment of the strategic medium-term objectives meant a huge work of analyses and diagnoses related to the present position of A.N.A.F.: strong points, weak points, the reforming necessary, the available resources, the determination of an action plan and of the responsible persons. The strategic planning involved the entire ANAF activity:

the taxpayers assistance and guidance procedures and regulations

control tax collection internal functioning

The strategic objectives reflect, by their goals and established acting directions, the fiscal policy options and a clear vision of the future becoming of the institution in the next five years of activity. The achievement of the strategic objectives involves also an extended information about, of all

the A.N.A.F. officers and their committment in the collective effort to fulfill the proposed goals.

The strategy aims to dynamize the reforming actions undertaken and to follow up better and more consistently the fulfillment of A.N.A.F. mission. B. Communication strategy The communication strategy, drafted in 2007, was realized by detailing and developing one of the significant modernization directions of A.N.A.F. contained in the Medium-term strategy namely, the improvement of the internal, external and international communication - essential premise for the strenghtening of the fiscal civism. The strategic objectives adopted in the communication strategy provide the aiming stakes for the enforcement of the communication policy, while the established acting lines lead to a better determination of the responsibilities and an additional accuracy related to the implementation of the Strategy. Besides the objectives of the external communication (with the taxpayers, mass media, employers' organizations, etc.) and international communication development, The Communication Strategy focuses on the internal communication development - being underlined in this way the essential role of the activity of the employers for the achievement in good conditions of the A.N.A.F. mission.

A.N.A.F. strategy means • a vision (about how the

institute will be in 2011); and • a way (the way to be followed

in order to achieve the vision)

Launching of A.N.A.F. Strategy 2007-2011


From time to time, A.N.A.F. communicates publicly its achievements and commitments

C. Annual performance planning - Annual plans The concern for planning existed starting with the moment of A.N.A.F. incorporation, when the General Directorate for International Cooperation, Planning and Inter-institution Liaise was established. During 2004 - 2006, the management system based on annual performance plans was implemented, as experiment. In 2007 there is, for the first time: • an organizational structure at central level,

designated exclusively to planning: the Strategic Planning Directorate, having extended responsibilities and new tasks (coordination of local unit activities)

• multiannual planning • establishment of a the aimed annual plan

indicator levels However, there are certain indicators for which the aim is to keep at least their previous year levels or to record only slight rate increases: we refered to those indicators which, when aiming a goal level, may have adverse effects. This is the case of certain control indicators as: number of verifications per inspector or additional collected amounts.

The year 2007 is the moment of the major changes the number of the performance indicators of the annual plan increased to 16, the calculation method was improved, the scope is more relevant,

the reporting methodology is more accurate, the responsibilities are clearer. The system indicators of the Performance plan on 2007 contains 6 sub-systems, grouped on great strategic objectives: 1. Collection improvement The budgetary revenues collection program fulfillment rate The legal person receivable recovery rate Large/medium-sized taxpayers' receivables recovery rate Budgetary revenues collection rate related to collection by forced execution 2. Fiscal civism strengthening The rate of voluntary compliance with the payment of the fiscal obligations (value) The rate of the voluntary compliance with the payment of the fiscal obligations (numerical) The rate of taxable income statements voluntary submission on tax types 3. Control of the fiscal evasion and fiscal indiscipline Number of verifications carried out by an inspector Supplementary amounts collected per inspector 4. Increase of the inspection quality The weight of the number of the contestations filed by the taxpayers in the number of taxation decisions issued 5. Improvement of the activity of contestation settlement The weight of the decisions to admit or to reject contestation in the total of the decisions delivered by the contestation settlement bodies within A.N.A.F. and the local General Directorates of Public Finances The rate of the amounts admitted by the courts in the total amount challenged in court 6. Qualitative assistance services Number of information notices on dysfunctionalties in the taxpayer assistance activity Number of letters settled in due term The term processing rate of taxable income statements Settlement rate of the negative V.A.T. balances having option of reimbursement


To realize the reform, A.N.A.F. relays essentially on the capacity of the local directorates to fulfill the objectives generated by the scheduling of the Medium-Term Strategy on annual plans. The annual planning provides a multiannual visibility on the strategic objectives. A greater responsibility of the local directorates for the fulfillment of the performance objectives involves also their more tide cooperation with the A.N.A.F. management and with the governmental authorities in general. Simultaneously with granting to the local units a greater responsibility and with the decentralization of certain decisions, especially regarding the meeting of the performance goals, the Agency

shall develop also an intense monitoring and supervisory activity of the fiscal status and potential of each of the local units in order to ensure a more accurate determination of their objectives. The A.N.A.F. performance objectives for 2008 are, ongoing, ambitious and because of that, with power of mobilization for the local structures. The goals established, sometimes at their maximum level (100%), must represent a challenge for A.N.A.F., for the manner in which it uses its resources.

Main performance indicators, achievements as against objectives in 2007

42,0

30,1

9,6

93,1

68,2

25,0

96,9

80,7

95,25

79,070,6

100,0

100,0

95,010,5

25,0

100,0 100,0

86,076,0

0

20

40

60

80

100

Rate of completion of the budgetary revenuesprogram

Rate of recovery of arrears from legal persons

Rate of arrears collection from large andmedium-sized taxpayers

Rate of budgetary reveues collected byenforcement

Rate of voluntary compliance to payment offiscal liabilities (value)

Rate of voluntary compliance to payment offiscal liabilities (numeric)

Number of complaints solved within the legaldeadline

Rate of tax return processing within deadline

Rate of voluntary submission of tax returns, bytype of taxes

Rate of solving within the legal deadline of VATreturns with negative VAT amounts and with

refund option

Achievements 2007 Objectives 2007


D. Estimation of the budgetary revenues - significant premise for the substantiation of the annual plans The estimation of the budgetary revenues is an relative recent activity for which development, significant efforts have been undertaken in 2007. The activity, rather experimental in the previous years, got a major significance starting with 2007, when the annual objective planning imposed the necessity to better substantiate the tax collection schedule. In the last year, the methodology to estimate the budgetary revenues on category of taxes, duties and social contributions has been drafted as well as the manner to schedule this collection at county levels.

4.2. informatization – factor of the A.N.A.F. reform and modernization The A.N.A.F. informatization was always a condition for the change and a premise for the increase of the efficiency of the activities developed by the institution.

• The systems VIES and SEED for the information exchange on V.A.T. and products taxable by excise duties, among the Member States, have been implemented;

• The e-submission of the taxable income statements, based on e-signature has been implemented;

• The administration of the natural person debts using a centralized architecture has been implemented;

• Pilot Centers or the centralized printing of the administrative documents designated to the taxpayers and and the Data

Main performance indicators - objectives 2008 (%)

10,15

100

74,8

25

100

95

100

90

100

100

25

76

0

20

40

60

80

100

Rate of completion of the gross budgetaryrevenues program

Rate of completion of the net budgetary revenues

Rate of recovery of arrears from legal persons

Rate of arrears collected from large and mediusized taxpayers

Rate of voluntary compliance to payment (value)

Rate of voluntary compliance to payment(numeric)

Number of complaints solved within the legaldeadline

Rate of tax return processing within deadline

Rate of voluntary submission of tax returns, bytype of taxes

Rate of solving of vat refund

Rate of solving of VAT refund with further control

Enforcement rate


Emergency Storage and Recovery Center have been incorporated

• The data exchange with the Social Security Houses has been developed;

• The adaptation of the assistance products to the new conditions of technical rearrangement and administration of the technical areas designated to the information technology has been performed

• The IT product regarding the creation of the sole database – DATA WAREHOUSE has been completed

Therefore, the feedback time of the fiscal administration was diminished by the automation of all the procedures for the management of the taxable income statements and fiscal payments. 4.3. Human resources, premise of the success The A.N.A.F. Human Resources Policy is one of careful selection of the new employees, of annual assessment of the quality of the entire personnel and of periodical vocational training. The hiring of the public officers is governed by transparency and avoidance of any corruption act, because the contest announcements are published in the Official Gazette and are posted at the registered office of the institution and on its Internet home page. The fiscal administration activity relays on the effort undertaken by the 24,903 employees out of which 2/3 are women.

The weight of the employees with high education is of 69%. To recruit human resources for the Romanian National Agency for Fiscal Administration, there are used o internal sources - promotion of members of

the agency personnel; o external sources - by publishing in the

Official Gazette, Part III, and in an important local daily newspaper, and by posting at the registered office and on the Internet home page of the institution, announcements informing about the organization and development of the contests for occupying posts in the agency

The professional ethic codes have been enforced and generalized for all the public officers. The vocational training attended by the employees are established upon employees' request or are decided by the institution management. The occupational training domains are, most frequently, the strictly specialized domains, but also the strategic ones (management, internal control, communication) or those which train the trainers. In order to improve the efficiency and effectiveness of the fiscal inspection activity there have been organized, following the cooperation with the Public Finances and Customs School within the Ministry of Economy and Finances, through its local centers in Oradea, Vâlcea, Vrancea şi Ilfov, courses for the improvement of the professional qualification of the personnel working within the bodies having fiscal inspection competence all over the country.


4.4. Development of the institutional relationships. Strenghtening of the international cooperation The relationships with the international environment are in a visible development in 2007. The international cooperation developed shows more and more the understanding of the importance provided by the international environment and of the opportunities provided by this cooperation, especially with the European Union. As example of cooperation of A.N.A.F. with the similar international authorities we underline the participation of ANAF to the cooperation framework provided by IOTA (Intra-European Organization of Tax Administrations). So, in 2007, ANAF responded to a great number of information requests addressed by the others Organization Member States and participated, through its representatives to a number of 10 events organized by IOTA. Remarkable is also the Romanian participation to the Fiscal Program, financed by the European Union, which objective is to develop the cooperation among the tax administrations of the Member States through collective acts.. ANAF succeeded in 2007 to improve the information exchange by concluding cooperation protocols with many public institutions. In the regard of the international cooperation, ANAF has an efficient information exchange with tax administrations all over the European Union, on the prevention, identification and control of the fiscal fraud. The spontaneous information exchange and the information exchange upon request at international level are made on the basis of the international conventions, and at European Union level are made on the basis of the community directives and regulations.

Management of the projects developed with external assistance Regarding the European Union assistance, in 2007 has been ensured the sustainability of the measures initiated through the twinning project "Strenghtening and development of the capacity to administer the budgetary revenues" (developed in partnership with France) for the following domains: deontology, budgetary estimation, implementation of the commitments assumed in the Management Chart, continuation of the works of teleprocedure extending. In partnership with the Tax Administrations from Spain and France, it was ensured the development of the twinning project „Completion of the harmonization of the fiscal law and consolidation of the tax administration”. The deliverable of the project have been procedures, guidelines, strategies, experience exchanges, twinning agreements at level of the local units for granting assistance to the taxpayers, occupational training courses and handbooks, all these being submitted to the following component Law and general procedure; Organization and Management; Fiscal control; Information exchange; Central Office for Contacts; Fiscal procedures and taxpayers assistance; Human resources and occupational training programs; Information Technology. World Bank financed in 2007 on the benefit of ANAF, a number of four technical assistance projects in the following domains: Development of the legal framework for the taxes and social


contributions on the wages; Development of the analytic capacity; Development of the organization and management system. Generally, the international cooperation and the development of projects externally assisted, allowed to the ANAF representatives to be present at a number of events as conferences, studying visits, seminars, working groups, etc.

4.5. Internal activity audit

• Audit development All these activities of international cooperation lead, by one side, to the promotion of ANAF achievements at international level and, therefore, to the improvement of the ANAF image in the world, and by the other side, to know better the tax administration partners and the trends in the field of the tax administration modernization.

The annual public internal audit plan of the General Directorate includes both missions aiming the activity of certain directorates within the central structure of A.N.A.F., and missions aiming the assessment of the activity of the public internal audit of the local structures within the county general directorates of public finances. The Audit Handbook on the use and audit of the performance indicators, was completed, being a valuable methodological support for the improvement of the audit activity and for the enforcement of the good practices which should become current work tools.

• General inspection A significant organizational novelty in 2007 was the establishment of the Directorate for General Inspection, having a major role in the identification of the corruption cases perpetrated within A.N.A.F. - both at central level, and at local level. The control activities developed by the general inspection have as objective the verification of the manner in which the tax administration

structures observed the law applicable to the fiscal debts, of the manner in which the contestations/information notices received from citizens have been settled, in this regard undertaking measures to protect the public funds and real assets and to compensate the damage caused.

The general inspection activity develops according to the internal control and review plan, based on control themes approved by the President of the Romanian National Agency for Fiscal Administration, information notices received from third parties, indicating clues of any nature related to the unlawful nature of certain operations, activities or acts undertaken by the central or local structures of A.N.A.F., information notices addressed by employees of the central or local structures of A.N.A.F. and ex-officio notices. 4.6. Public communication The activity of public relations changed following the enforcement of the principles of transparency and good information of the citizens. One of the challenge A.N.A.F. dealt with in this field was the increasingly need of cooperation with the taxpayers therefore, the public communication became an activity developed

with responsibility and professionalism which contributed significantly to the institution credibility. Mass media represents the main partnership of A.N.A.F. for the activity of informing the public on the tax administration activity.


154 journalists of more than 50 central and local written press editorial offices, 11 radio channels and 15 TV channels have been accredited. In 2007, ANAF transmitted to them 137 press releases.

The activity of public communication and relations consisted, in 2007, of: press release drafting and transmission, answers to the phone or written requests, participations to talk-shows, interviews and broadcasts on radio/TV.


II. NATIONAL CUSTOMS AUTHORITY


Message of the A.N.V. Vice-President

The year 2007 was the year of ongoing profound changes, the Romanian Customs functioning, from the beginning of the Integration in EU, according to the regulations applicable to all the European Union Member States. These changes imposed the initiation of certain indispensable measures to improve the administrative competence in order to become compliant with that of the similar community structures, as well to ensure the interoperability with the European Commission information systems and the securing of the external EU border. The customs administration was not found unprepared at the integration moment, or facing major difficulties within the customs procedures for the goods entering or exiting in/from the Community customs territory. This was possible mainly following the organizational measures undertaken on time, measures which took into consideration the imminent dissolution of the customs offices from the borders with Hungary and Bulgaria. The personnel of these structures have been redistributed in order to ensure the fulfillment of the objective of Community new border securing. The successful accomplishment of the new mission by the Romanian customs authority was possible because of the computerization of the customs procedures and the assuring of an optimal functioning of the informatics systems interconnected with those of the European Commission. In order to fulfill the objective of community external border securing, the customs

administration has collaborated tidily both with the customs administrations of the Member States, at Community level, and with the other authorities competent in this field, at national level. In the field of the cooperation with other institutions, it should be underlined the intensification of the collective efforts to prevent and control the corruption. Regarding the protection of the EU financial interests as well as those of the holders of intellectual property rights, in 2007 was realized the collection of amounts due to the EU budget and increased significantly the number of contraband or fake goods retained. The year 2007 meant for the Romanian Customs the undertaking of new competences in the field of the supervision of production and movement of the goods taxable by excise duties. The most significant results of the customs authority, following the control of the trading of counterfeited goods, have been the following: confiscation of pirate goods in a quantity greater by 2.10 times than the quantity confiscated in 2006 (20,204,947 pieces in 2007 compared to 9,603,194 pieces in 2006); the increase by 169% of the amounts of the differences due to the state budget for customs tax and other tax and duty, including their related accessories (total amount of RON 242,063 thousand, compared to RON 142,990 thousand in 2006); the increase by 360% of the amounts of customs tax and other tax and duty and related differences, including the related accessories, cashed to the state budget (the total amount cashed was of RON 180,433 thousand in 2007 compared to RON 50,027 thousand, cashed in 2006). The main concerns in 2008 shall be the consolidation of the administrative competence in the field of carrying out of the fiscal inspections and the development of an extended fiscal evasion control program. Gelu Ştefan Diaconu Vice-President of ANAF


Customs activity in 2007 - an activity at the community

standard level

The Romanian customs adapted quickly and consistent to the need of the taxpayers for simple and fast services, for a fair competitive environment and for correctness from the part of the customs officers: • the customs clearance formalities have been

simplified, modernized and computerized; • the control of the fraud and contraband by

control acts developed with professionalism led to good results;

• the avoidance of the direct contact with the customs personnel in case of the customs simplified clearance formalities as well as the measures for the prevention and punishment of the corruption acts led to the modification of the perception of the public regarding the quality of the customs officers.

The current customs clearance formalities represent modern special working systems providing many major advantages for the economical agents who are authorized to develop international trading activities. The generalization of these simplified customs clearance formalities does not imply a decrease of the customs control quality because, in counterparty, a significant focus is on the subsequent control activity developed at the registered offices of the relevant companies. The year 2007 was a year of ongoing profound change in customs field. The Romanian Customs operated from the first moment of the integration according to the regulations applicable to all the European Union Member States. The improvement of the administrative competence of A.N.V. continued in order to become compliant with that of the similar community structures, as well to ensure the interoperability with the European Commission information systems and the securing of the external EU border.

The enforcement of the measures having as main objective the recovery of the delays recorded in the fulfillment of the commitments assumed in the European integration process has been accelerated. The customs policy aims mainly the improvement of the business environment by harmonization of the national legislative framework, adopting of the community working models and tools, fluidization of the customs process and significant diminishing of the corruption. The supervisory operating competence has been strengthened also out of the customs offices all over the territory of Romania. Such an approach was determined by the enforcement of the European legislation on the supervision and control of the intra-community and extra-community trading operations, in the context of the free movement of goods and according to the new tasks and competences imposed by the responsibility of the EU external border secure, simultaneously with the assurance of the fluidization of the cross-border traffic. The customs activity is oriented to the prevention and control of the new fraud forms

appeared once the customs control at the internal EU border, between Member States, was removed.


The information exchange - a decisive factor for the fraud control

It began the undertaken in stages of the competences for the supervision and control of the operations with goods taxable by excise duties. Starting with 1st January 2007, it was aimed both the compliance with the community customs administration structures, and the harmonization with the recommendations of the European Commission for the development of the cooperation programs, being meanwhile ensured the implementation of the community principles regarding the transparency of the management act, the decentralization of the decision making and the consolidation of the structure necessary to the verification of the information notices about corruption acts. Following the accession of Romania to E.U., the activity of the customs administration was reorganized After the accession, the customs offices located at the border with the Republic of Hungary and some customs offices located at the border with the Republic of Bulgaria have been closed and the personnel of these structures have been redistributed in order to ensure the fulfillment of the objective of the new community border securing. New structures have been organized, both at central level, and at regional level, in order to ensure an unitary monitoring of the excise duty authorization and supervisory activities as well as customs operations. New structures have been established also for the control of the fiscal and customs fraud and for the processing of the data and information specific to the fiscal supervisory activity.

775 public officers

have been recruited,

mainly for the excise duty management, the fiscal supervision of the bond warehouse, the mobile team and the subsequent control. Now, there

are 580 permanent and temporary fiscal surveyors and 180 inspectors working in the mobile teams.

Taking into consideration the necessity to develop and strengthen the cooperation mechanisms and the information exchange at national and international level, a set of special measures has been initiated and implemented. Following the commitments assumed in the accession process regarding the development of the administrative competence of the Romanian customs in 2007 on goes the implementation of the Sectorial Multi-annual Phare Program for 2004 - 2006 "Improvement of the management and control of the borders", which contains the following projects: • ”Endowment of certain border passing

offices with special detection equipment; • ”Purchase of equipment necessary to the

mobile teams”; • "Technical assistance for the execution of

the informatics’ processing component of the anti-drug information"

• ”Development of the customs lab network; • ”Strengthening of the operational

competence of ANV according to the e-customs concepts of the EU".

Measures in Common Agricultural Policy

During 2007, in order to observe the assumed commitments, intensifies the information exchange among the Romanian Customs Administration and the other institutes from the country having competences in the management


Opening to cooperation - support of the modernization

of the measures established in the Common Agricultural Policy, namely: • Payment and Intervention Agency for

Agriculture; • National Sanitary, Veterinary and Food Safety

Authority; • Ministry of Agriculture, Forests and Rural

Development. On the Internet home page of the customs authority it was created the site - Common Agricultural Policy - in order to ensure the information of the business environment from Romania about the measures established in the Common Agricultural Policy.

Compliance with, and interoperability with the informatics’ systems of DG TAXUD In 2007, the National Customs Authority completed, tested and interconnected the following modules and components, with the European customs informatics systems: ITO (Compulsory Tariff Information); TQS (Tariff Quote System); ECS (Export Control System) ; AFIS (system designed for the customs information exchange); NCTS-TIR (interface system between the community computerized transit system and the transit system under the cover of the TIR carnet); generation of the program for the follow up of the closing of the circuit of the administrative documents accompanying the goods taxable by the MODTRANS-DAI excise duty.

The Helpdesk Compartments for NCTS (New Computerized Transit System), ECS (Export

Control System) and TARIC have been established. The results of 2007 - successes of ANV in the struggle against the customs offences The customs activity led to very good results in the regard of the identification of the customs fraud in the most sensible fields: commercial offences (affecting the taxation also), inobservance of the intellectual property right and contraband. In 2007, the number of frauds/irregularities

identified was of 4 364; there were found differences related to the customs taxes and other taxes and duties, including the related accessories due to the state budget, in amount of RON 242,063 thousand, compared to the amount of RON 142,990 thousand found in 2006, which represents an increase of 169%. Following the customs control activity, in 2007 have been cashed differences related to customs taxes and other taxes and duties, including their related accessories, in total amount of RON 180,433 thousand, compared to the amount of RON 50,027 thousand, cashed in 2006, which represents and increase of 360%. The results obtained related to the intellectual property rights (IPR) during 2007 compared to 2006, it is ascertained an improvement of the activity: the total quantity of goods restrained because they infringe an IPR was 2.10 times greater than in 2006 (held goods breaching a DPI was 2.10 bigger (20,204,947 pieces in 2007 compared to 9,603,194 pieces in 2006).


Also the results obtained in the unlawful traffic control are good. Supervision of the excisable goods - an activity undertaken by A.N.V. The customs authority develops a permanent supervisory activity upon the 78 fiscal bond warehouses. Also, there have been undertaken 130 denaturation operations on 800,000 l of ethylic alcohol.

20 requests, addressed by the EU Member States, have been received, related to which have been transmitted the verification reports. Following the supervision of production, storage, movement and trading of the excisable products, a number of 2 000 frauds related to excise duties have been found, namely, for the tobacco and tobacco products, alcohol and alcohol products, mineral oils and other excisable products.

Vehicles involved in contraband that have been confiscated or restrained by the customs administration following the coming into force of the Government Decision 946/2007

The vehicle type Confiscated Retained Total Undertaken under state

property

Cars 79 230 309 57

Goods transportation means 6 6 3

Motor coach 3 2 5 2

Minibus 5 5 3

Vessels 2 2

III. Financial Guard 40

IIIIIIIII... FFFiiinnnaaannnccciiiaaalll GGGuuuaaarrrddd


Message of the General Commissioner of the Financial Guard

The special nature of the inspections carried out by the Financial Guard (unexpected, operative), leads to the fact that the responsibilities of the institution are well enough determined and delimited from the responsibilities of the other control structures of ANAF. In the struggle of the control structures of A.N.A.F. against the black economy, with the declared purpose to diminish the fiscal fraud and evasion (the most important components of the black economy), the contribution of the Financial Guard is a successful one.

Both its own actions and the interinstitutional cooperation made the results obtained in 2007 for all the indicators to be higher than those of the previous years, the most significant results being related to the value of the damages established which is over 80% higher compared to this indicator of 2006, and to the seizures, being confiscated a cigarette quantity 7 times and a alcohol and alcoholic drinks quantity 4 times more than the similar quantities confiscated in the previous year. The focus of the control actions on the field and taxpayers with a large fraud potential, on the large tax evasionists, leads to the fact that most of our actions be a successful ones. Therefore, our results are frequently, spectacular. In order to improve the efficiency of its inspections, the Financial Guards has a declared policy of cooperation with the other structures within A.N.A.F., so that, by our commonly focused actions to be able to improve both the quality and the efficiency of our inspections, avoiding meanwhile the overlapping with the other structures. The strengthening of the fiscal discipline of the taxpayers, and therefore, the consolidation of the fiscal civism of them are an important objective of our activity. This objective along with the mediatization of the significant cases found during our inspections, represent an important factor for having a healthy business environment, not disturbed by the taxpayers who do not pay their taxes, duties and contributions and who are, on the market, competitors of those who pay on term all their budgetary obligations.

It is important to underline that the actions of the Financial Guard have both sanctioning and

preventing nature, as the case may be, contributing to the discouragement of the facts of fiscal evasion and implicitly to the strengthening of the compliance level of the taxpayers.

For 2008 we aim, mainly, to increase the efficiency and effectiveness of the actions in progress as

well as the consolidation of the responsibilities and role of the Financial Guard among the institutions involved in the control of the fiscal fraud and evasion, as well as of the other unlawful facts connected to the above mentioned facts. Adrian Cucu General Commissioner of the Financial Guard


Financial Guard in 2007 – dynamization of the fiscal evasion control

The Financial Guard carries out operative and unexpected inspections to the purpose of preventing, identifying and controlling any economical, financial and customs acts and facts leading to the perpetration of fiscal fraud and evasion.

For 2007, this institution assumed as main objective, to increase the activity quality, especially regarding the identification of the serious deviations from the law, as the unlawful production and trading of the excisable products, which generate, following the fiscal evasion, significant adverse effects on the state budget revenues. During 2007, the inspectors of the Financial Guard carried out 173,350 inspections. Out of them, in about 80% of the cases, deviations from the financial discipline have been found. For the contraventions found, sanctions have been applied, leading to the collection of additional revenues in total amount of RON 272,983 thousand to the state budget, out of which the amount of RON 178,583 thousand has been cashed effectively during the inspection.

Goods and liquidities without lawful origin or resulted following the perpetration of unlawful facts, in amount of RON 103,822 thousand, have been confiscated. During the inspections, facts with offence nature

causing to the state budget a damage in amount of over RON 1,400,000 thousand, have been identified, being forwarded a number of 2,375 criminal information notices to the criminal investigative bodies and a number of 1,159 cases to the fiscal bodies, in order to be continued the investigations. All the indicators in

2007 are higher than those of the previous years, the most significant results being related to the value of the damages established, which is over 80% higher compared to this indicator of 2006, and to the seizures, being confiscated a cigarette quantity 7 times and a alcohol and alcoholic drinks quantity 4 times more than the similar quantities confiscated in the previous year.

The weight of sanctions by main activities in 2007

alcohol and alcoholic drinks

23%

oil products 4%

servicies 22%

cigarettes 20%

recycling 3%

milling and bakery 12%

commercial 16%


Numar de agenti economici verificati

de Garda Financiara

148.584153.350

2006 2007

Outcomes of Financial Guard

110.400 417.377

312.792

2.321.005

2006 2007

Alcohol and alcoholic drinks confiscated (liters)Cigarettes confiscated (pack)

Main action directions o the control of the unlawful trading of

excisable products, being carried out in this purpose inspections, during which the main and permanent objective was to identify the clandestine areas where the unlawful trading activities (production, storage, trading, etc.) developed.

o the control of the passing over the border and trading of the cigarettes originating from contraband or internal clandestine production, the actions in this field having spectacular results mostly during the IV trimester;

o verification of the endowment with, and of the electronic invoice devices, at the economical agents who develop retail trading activities;

o the observance of the fiscal legislation by the importers of consumption goods,

both alimentary and not alimentary ones,

o identification of the economical agents working in the field of trading of the technical plants, cereals, miller products and planning who did not record in the accounting all the trading operations developed or who use phantom firms to increase the expenses recorded in the accounting in order to diminish the taxable incomes and the payable V.A.T.;

o discouragement of the unlawful procedures in the field of recyclable waste;

o diminishing of the unlawful transactions in the field of wood exploitation, processing and trading.

Interinstitutional cooperation The Financial Guard settled a number of 382

information notices received from ONPCSB, 469 upon the request of the prosecutor's office (out of which 256 upon the DNA (Anticorruption National Directorate) request), 29 received from DLAF and 2572 received from the Police. All these works had a complex nature and involved a significant number of inspectors belonging to all the local structures of the institution. The actions of the Financial Guard have both sanctioning nature and prevention nature through the effect upon the fiscal discipline, contributing to the discouragement of the facts of fiscal evasion, and implicitly, to the strengthening of the taxpayers

compliance to the fiscal discipline. A significant point is the adaptation of the institution activity to the appearance of the new forms of multinational and intra-community fraud. New competences for the Financial Guard The organization and functioning regulations of the Financial Guard shall be improved in order to grant more competences on carrying out the investigations preliminary to the criminal investigation, as collection, processing, storage and exchange of information related to the facts of

Number of legal persons controled by the Financial Guard


In tr-un spa ţ iu s itua t în afa ra unu i antrepozit fisca l, a fost dep is ta t un depozit c landestin de bautu ri a lcoo lice nem arcate, im proviza t în bena unu i au tocam ion scos d in c ircu la ţie .

fiscal evasion. Also, in case it deals with fiscal offences, the inspection carried out by the inspectors of the Financial Guard should have the nature of a fiscal partial inspection, carried out under the provisions of the Fiscal Procedure Code and of its enforcement norms. The new competences to be granted to the Financial Guard are justified by the good premises

offered by the professional quality of the inspectors (taking into consideration their professional knowledge and experience in the identification and control of the fiscal fraud and evasion facts) as well as by the necessity to diminish the state budget damage recovery period.

-

The Financial Guard identified a TIR registered in Ukraine, which, according to the documents, transported grapesr, but under the grapes there have been found 84000 cigarette packages unmarked.

In a space situated near a fiscal warehouse there was found an alcoholic unmarked drinks clandestine store which was improvised in the container of an out of function tuck.


IV. A.N.A.F., IN THE CONTEXT OF THE NATIONAL

ANTICORRUPTION STRATEGY During the period 2005 - 2007, a number of special measures have been undertaken in all the A.N.A.F. structures in order to meet the objectives established in the National Anticorruption Strategy.

The anti-corruption activity in the tax administration The fact that A.N.A.F. assumed the action principles and lines established in the National Anti-Corruption Strategy has been reflected in the following action lines: • the taking over of the Financial Guard

and National Customs Authority by the Ministry of the Public Finances, and subsequently, their subordination to the National Agency for Fiscal Administration;

• the improvement and simplification of the methods and techniques used by the inspectors

• undertaking of measures regarding the observance of the provisions of the Code of the fiscal inspector ethic in order to ensure high quality services. In this regard, there have been organized activities to

1. train the trainers, following which 50 fiscal inspectors became fiscal trainers;

2. organize the occupational training of 500 fiscal inspectors.

• drafting of the Fiscal inspection Guidelines, as a daily work tool for the fiscal inspectors, but also as reference document and doctrine providing information on fiscal inspection techniques, procedures and methods to all the fiscal inspectors. This handbook was distributed in 4,000 copies to the personnel carrying out fiscal inspections;

• drafting of methodologies and procedures for the fiscal inspection activity, as well as the updating of those existing, all these ones being transmitted to the structures having responsibilities in the fiscal inspection: Methodology for the inspection of the wholesale traders and distributors of products excisable (alcoholic drinks and/or tobacco products); Methodology for the inspection of

the economic agents developing activity through duty-free shops; Methodology for the unexpected inspections to the fiscal bond warehouse for the manufacturing of the tobacco products; etc.)

Besides the measures aiming directly the fiscal inspection, there have been taken also other measures to prevent and control the corruption facts: • introduction for the taxpayers of the

modern methods to fulfill their fiscal obligations, namely the online submission of the taxable income statements and payment of the taxes, duties and contributions, following which the possibility to occur certain facts of corruption has diminished;

• granting of the technical assistance by phone and e-mail to the taxpayer, and the establishment of call centers in Bucharest, following which the possibility to occur corruption facts has diminished;

• simplification of the procedures regarding the tax, duty and contribution administration;

• development of a clear language, especially in the fiscal forms and guidelines;

• access to the information about the fiscal law, the necessary documents and other useful information on the Internet portal of the National Agency for Fiscal Administration;

• establishment, at the level of the National Agency for Fiscal Administration, of the Directorate General of Inspection, directorate within which operate two offices specialized in the verification of the information notices received from the taxpayers referring to potential corruption facts of the public officers from the system;

• use of the management control system focused on the issues related to the integrity and corruption;

• computerization of the processes within the tax administration, following which the opportunities to occur corruption facts have been effectively limited.


Actions of the National Customs to eradicate corruption • enforcement of the Community Integrated

Customs Tariff (TARIC) in the process of determination of the customs taxes and duties;

• extend of the use of the facilities provided by the Customs Integrated Computerized System by the economic agents in order to automat process their customs statements on Internet;

• introduction of an interface system between the customs statement processing computerized system and the Community Integrated Customs Tariff (TARIC);

• improvement of the Internet access to information using Intranet, WEB, Portal;

• making available for the public free-of-charge of the complaint form introduced by the Conduct Code for the public officers working within the customs authority;

• posting at the border customs offices of an information notes on the lawful conditions for the introduction and exiting in/from the country of the different goods by the natural persons;

• posting at the County Directorates for excise duties and customs operations and at the border customs offices, of some warning notes addressed to the public, by which it is interdicted to offer money or goods to the customs officers and in which is displayed the phone number of the free-of-charge phone line where the corruption facts may be announced;

• observance of the legal framework for the selection, recruitment and promotion of the public officers in the customs authority;

• extend of the allocated HW capacity and reorganization of the reference database;

• completion of the implementation of the customs operations system (ANV 1.18) based on use of TARIC / TARIC (CE) in the context of the interoperability of SIIV with the DGTAXUD systems;

• ensuring the technical assistance at software (TARIC, NCTS, Accounting-financial) level, the HW maintenance, the necessary human resources and infrastructure;

• completion of the own confidential database in view of storing, studying and analyzing the information related to the customs personnel.

The struggle of the Financial Guard against the corruption The measures undertaken by the Financial Guard to control corruption are the following: • periodical change of the structure of

the teams of inspectors; • change of the areas and activity fields

where the teams of inspectors work; • effective training of the compartment

chiefs in the on-the-spot verifications,, in order to coordinate the more complex actions and to check the manner in which the sub-inspectors carried out their job tasks.

Generally, the Financial Guard permanently aims to adapt its control methods to the phenomena the Romanian economy deals with, drafting activity strategies and programs able to ensure the increase of the activity efficiency and the fulfillment of the tasks compliant with its competence. In order to enforce these measures, the National Agency for Fiscal Administration collaborated with the Directorate for Fiscal Control, the Anti-Fraud Directorate and the National Customs Authority as well as with the other institutions having competences in the fight against the economical-financial criminality and the money laundering, concluding cooperation protocols with the General Inspectorate of Police and with the National Office for Prevention and Control of Money Laundering, to the above mentioned purpose. In order to ensure the protection of the financial interests of the European Union in Romania, the Financial Guard cooperates with the office specialized in the fight against fraud of the General Commissariat within the Anti-Fraud Department of the Romanian Government. Also, the Financial Guard was involved in the development of certain projects financed by European funds, designated to contribute to the improvement of the institution activity, including in the field of the corruption control: the PHARE Project "Improvement of the fight against corruption".


V . OBJECTIVES FOR 2008 AND MEDIUM-TERM OBJECTIVES In 2008, A.N.A.F. shall continue to enforce the measures related to the objectives of its Strategy on medium term, launched in the first semester of 2007. These measures are included in the Strategy Implementation Plan, , obtaining in this manner a clear vision of the future development stages, with their action lines, terms and responsibilities.

1. Improvement of the assistance, services, procedures

The online submission of the taxable incomes statements shall extend in all over country, for all the taxpayers.

The payment by all the taxpayers of their obligations contained in the "Statement of payable general consolidated budget obligations˝ in a sole account opened at the Treasury units.

Implementation of the e-payment (by card) for all the fiscal obligations.

A database shall be created, containing the questions/answers regarding the clarification of the fiscal law.

The functions of the Centers for assistance by phone (Call Centers) of Bucharest shall be developed and five more such centers shall be established at local level.

Drafting, launching and advertisement of the Chart of the Taxpayer rights.

Fiscal education programs shall be undertaken and the external communication capacity of ANAF shall be straightened.

In 2008, for the first time, shall be publicly launched the Annual Performance Report – moment of reviewing the tasks completed and of commitments for the future.

Drafting of a special procedure to grant personalized assistance, establishing strict rules for the access in the taxpayer database so that the confidentiality of their data could be kept.

Development of external communication services

Implementation of the database containing questions and answers, on fiscal issues;

Improvement of the fiscal education of the existing and future taxpayers.

Management within a special site having its address on ANAF Portal, of the information notices and complaints of the taxpayers referring to the dysfunctions in the assistance activity and in the fiscal officers’ conduct.

2. Control of the fiscal indiscipline and evasion

The risk analysis shall be extended: creation of the necessary database, following to establish the criteria, procedures and indicators starting with 2009

The research - documentation component in fiscal field (which shall become effective in 2009) shall be developed.

Creation of the premises (by drafting methodologies and good practice guidelines) for the electronic control and transfer price control to the purpose of making them effective starting with 2009.

Development of the information bilateral exchange and mutual assistance with the Member States, and with other national institutions and authorities, the extent and diversification of the information exchange with the institutions holding data on the assets and revenues of the taxpayers, both from the country and from the community space.

Continuation of the transfer of competences on fiscal authorization and inspection in the production, movement and use of the excisable products to A.N.V.

Strengthening of the administrative competence in the control of the

V . Objectives for 2008 and medium-term objectives 48

production and movement of mineral oils

Implementation of the community norms on the limitation of the introduction of different goods exempted from customs duties, VAT and excise duties in the country by the travelers in order to trade them.

Granting to the Financial Guard, of competences to undertake acts preliminary to the criminal investigation and competences to put under seizure the goods and assets involved in facts of fiscal nature until the criminal investigation is completed or until lab analyze results are obtained.

3. A better collection

Elaboration of an integrated management system of the budgetary debts for all the types of taxes and for all the taxpayers.

Development of the Data Emergency Storage and Recovery Center.

The operative follow-up of the initiation of the insolvency procedure in case of taxpayers related to whom the measures of forced execution did not bring results.

Continuation of the monitoring of the process of diminishing of the receivables to the large and medium sized taxpayers

Monitoring of the recovery of the state aids unlawful/interdicted.

Improvement of the procedures of forced execution, insolvency and establishment of the jointly liability as well as of the collection procedures through the sale of the goods under seizure.

In 2008, the improvement of the forced execution, insolvency and jointly liability establishment procedures, begun in 2007, as well as the collection procedures using the sale of the goods under seizure, shall continue (following to be improved the existing forms).

4. Regulations drafting of a compensation procedure of

the debts administered by the M.E.F. by the debtor debts representing amounts to be reimbursed to the budget.

drafting of a procedure to elaborate norm drafts in the field of forced execution;

drafting of an endorsement procedure for the norm drafts (in cooperation with the directorates involved in the endorsement process);

drafting of the procedure to settle the correspondence with the claimants

modification and completion of the Methodology to distribute the amounts paid by the taxpayers in the sole account and to extinguish their fiscal obligations.

regulation of the transfer of the amounts recovered in Romania, representing fiscal debts established in other EU Member States as well as the transfer of the amounts recovered by the competent authorities for the other Member States, representing fiscal debts established in Romania.

elaboration of the guidelines for the enforcement of the provisions of the Chapter 13 – International issues, Fiscal Procedure Code.

5. Improvement of the internal processes and coordination

A.N.A.F. shall further develop the management based on performance objectives and indicators contained in the annual plan;

a general performance synthetic indicator shall be calculated to measure the activity efficiency: the cost of each RON collected.

extending of the computerization in the field of communication with taxpayers and in its own activity

extending of the computerization of all the taxable income statement and fiscal payment management in all the country and for all the taxpayers;

carrying out of an e-archive; effective use of the centralized

database DATA WAREHOUSE


(become operational by the end of 2007);

drafting of the Statute of the public officer of ANAF and Statute of the inspector of the Financial Guard

** ** **

The commitment of ANAF, contained in its Strategy, to increase the collection rate by 1% each year, is kept in 2008 also, when the planned weight of the budgetary revenues collected by the tax administration shall represent 30.8% of the GDP.

Ponderea veniturilor colectate de A.N.A.F., in PIB (%)Evolutii si estimare anul 2008

29,8

27,528,2

30,8

2526272829303132

2005 2006 2007 2008

The A.N.A.F. collected revenues weight in G.D.P.(%) Estimate and development for 2008


VI. STATISTICS REPORTS

Tax administration TABLE 1 Employed personnel

EMPLOYED PERSONNEL

total posts, out of which: high education short-term studies medium education*:

EMPLOYED PERSONNEL

total women men total women men total wom

en men total women men

1 2=3+4 3=6+9+12 4=7+10+13 5=6+7 6 7 8=9+10 9 10 11=12+13 12 13 TOTAL own personnel of the National Agency for Fiscal Administration

958** 644 314 825 552 273 5 1 4 128 91 37

TOTAL personnel of the counties' and Bucharest Municipality’s General Directorates of Public Finances

23.945 16.824 7.121 15.836 10.725 5.111 131 94 37 7.978 6.005 1.973

TOTAL personnel of the National Customs Authority

3.934 1.708 2.226 2.464 1.051 1.413 99 36 63 1.371 621 750

TOTAL personnel of the Financial Guard

1.325 176 1.149 1.233 113 1.120 2 0 2 90 63 27

GENERAL TOTAL 30.162 19.352 10.810 20.358 12.441 7.917 237 131 106 9.567 6.780 2.787

Weight in the total employees (%)

100 64 36 67,5 41,2 26,2 0,8 0,4 0,4 31,7 22,5 9,2

* includs also the personnel with employment contracts for the position of caretaker and worker for which it does not exist the compulsoriness of graduation of college education ** does not include the personnel of the vice-president, president and general secretary, vice-president and president offices

VI. Statistics reports 51

TABLE 2 The activity of assistance at central level

Indicator denomination 2006 2007 2007/2006 (%)

Number of settled letters 1.520 1.315 87 Number of settled e-mails 3.880 5.290 136 Number of phone calls 12.800 34.370 269 Number of envelopes transmitted to the taxpayers in the mail dispatch/receipt system for the taxable income statements

450.000 510.150 113

TABLE 3 The activity of assistance at local level

Indicator denomination 2006 2007 2007/2006 (%)

Number of subjected taxpayers, natural persons 2.603.722 2.514.594 104 Number of subjected taxpayers, legal persons 1.046.483 930.944 112 Number of officers involved in the assistance activity 1.575 1.780 88

Number of settled letters 43.140 38.662 112 Number of settled e-mails 2.763 1.167 237 Number of phone calls 835.923 765.837 109 Number of PCs 766 647 118 Number of phone lines 492 461 107 Number of preparing activities 3.936 3.777 104


Table 4

Development of the cashed budgetary revenues

Cumulated amount cashed in 12 months

Weight in GDP (%)

Budget denomination

2006 2007

amount cashed

in 2007 / amount cashed in 2006

(%)

Cashing program for

2007

Program fulfillment

level

(%) 2006 2007

RON million 62.787,42 74.994,61 119,44 81.732,40

State budget EURO million 17.814,56 22.471,64 126,14 24.490,58

91,76 18,34 19,19

RON million 7.905,47 10.528,83 133,18 11.382,00

- Profit tax EURO million 2.243,00 3.154,89 140,65 3.410,54

92,50 2,31 2,69

RON million 9.753,76 13.877,44 142,28 13.720,50

- Income tax (including the residual wage tax ) EURO

million 2.767,42 4.158,28 150,26 4.111,26 101,14 2,85 3,55

RON million 27.763,04 31.243,22 112,54 34.387,00

- VAT EURO million 7.877,16 9.361,83 118,85 10.303,84

90,86 8,11 7,99

RON million 10.589,51 12.507,40 118,11 12.402,00

- Excise duties, out of which: EURO

million 3.004,54 3.747,76 124,74 3.716,18 100,85 3,09 3,20

RON million 646,45 1.299,56 201,03

excise duties according Law 95/2006(vice

duty) EURO million 183,42 389,40 212,31

0,19 0,32

RON million 2.414,77 876,95 36,32 1.596,17

-Customs duties EURO million 685,14 262,77 38,35 478,28

54,94 0,71 0,22

RON million 20.311,00 24.633,10 121,28 24.766,71 Social Security

Budget EURO million 5.762,80 7.381,15 128,08 7.421,18

99,46 5,93 6,30

RON million 2.270,97 2.513,10 110,66 2.529,70 Unemployment

Fund EURO million 644,34 753,03 116,87 758,01

99,34 0,66 0,64

RON million 10.654,80 12.966,29 121,69 13.179,46

Sole National Health Fund EURO

million 3.023,07 3.885,26 128,52 3.949,14 98,38 3,11 3,32

RON million 96.670,64 116.406,66 120,42 122.208,27 TOTAL, including

revenues according Law 95/2006(vice duty)

EURO million 27.428,19 34.880,49 127,17 36.618,90

95,25 28,23 29,79

Note: 1. The program for the amounts collected to the state budget does not contain the incomes according L.95/2006 (vice duty)

2. The revenues of the social security budget includes also the expenses deducted directly by the employers, which represent incomes:

3. Excise duties related to the vice duty are collected starting with August 2006;

* average exchange rate for 12 months of 2006, calculated based on the data taken from NBR: 3,5245

* average exchange rate for 12 months of 2007, calculated based on the data taken from NBR: 3,3373


TABLE 5

Revenues cashed from the value added tax:

TOTAL ANNUAL REALIZED Indicator

2006 % 2007 % 2007/2006

(%)

VAT cashed, out of which: 1=2+3 36.337,86 100 38.950,60 100 107,19

VAT cashed related to internal operations 2 17.267,36 47,52 33.957,16 87,18 196,66

VAT cashed related to goods import operations 3 19.070,50 52,48 4.993,44 12,82 26,18

V.A.T. returned 4 8.850,74 * 8.296,32 * 93,74

Interests and penalties 5 275,92 * 588,94 * 213,45

V.A.T. Total 6=1-4+5 27.763,04 * 31.243,22 * 112,54

TABLE 6

Revenues from excise duties, including vice duty, in 2007 compared to 2006

2006 2007 Weight in total excise duties

EURO million RON million

Weight in GDP

(%) EURO million RON million %

Weight in GDP

(%)

Excise duties, out of which: 3.004,54 10.589,51 3,09 3.747,76 12.507,40 100,00 3,20 a) internally 2.783,71 9.811,19 2,87 3.671,11 12.251,59 97,95 3,14 - Mineral oils 1.582,14 5.576,27 1,63 2.037,39 6.799,37 54,36 1,74

- Alcohol, alcoholic distilates and drinks, out of which:

286,59 1.010,09 0,30 288,67 963,39 7,70 0,25

vice duty 14,18 49,97 0,01 29,37 98,00 0,78 0,03 - Tobacco products, out of which: 895,69 3.156,86 0,92 1.278,32 4.266,13 34,11 1,09

vice duty 168,04 592,25 *** 348,20 1.162,06 9,29 0,30

- Coffee 0,01 0,04 *** 20,98 70,03 0,56 0,01

- Electricity 8,97 31,60 *** 14,42 48,12 0,38 0,01

- Cars manufactured internally

3,78 13,33 *** 0,08 0,26 0,00 ***

-Air conditioning systems 0,00 0,00 *** 0,00 0,00 0,00 ***

- Other products 6,53 23,00 *** 31,25 104,29 0,83 0,03

refunds/settlements 12,20 42,99 0,01 12,64 42,18 0,34 0,01

b) imports 233,03 821,31 0,24 89,29 297,99 2,38 0,08

- Mineral oils 89,84 316,64 0,09 38,16 127,35 1,02 0,03

- Alcohol, alcoholic distilates and drinks, out of which:

6,91 24,37 *** 5,02 16,74 0,13 ***

vice duty 0,72 2,54 *** 3,61 12,04 0,10 *** - Tobacco products, out of which: 2,68 9,44 *** 7,16 23,89 0,19 ***

vice duty 0,48 1,69 *** 6,04 20,16 0,16 ***

- Coffee 42,97 151,44 0,04 21,33 71,18 0,57 0,02

- Electricity 0,05 0,19 *** 0,00 0,00 0,00 ***

-Cars 72,95 257,11 0,08 15,02 50,14 0,40 0,01

-Air conditioning systems 4,52 15,93 *** 0,01 0,02 0,00 ***

- Other products 13,11 46,19 0,01 2,60 8,67 0,07 ***

*** less than 0.01


TABLE 7

Outstanding receivables to be recovered, per budgets, during 2005-2007:

RON million Outstanding receivables to be

recovered Budget type 31.12.05 31.12.06 31.12.07

2007/2005 (%)

2007/2006 (%)

State budget 9.488,1 8.726,6 7.652,0 -19,4 -12,3

Social Security Budget 6.994,8 4.636,6 3.008,6 -57,0 -35,1

Unemployment Fund 773,9 492,7 361,1 -53,3 -26,7

Sole National Health Fund 1.041,4 855,7 840,2 -19,3 -1,8

General consolidated budget (RON) 18.298,2 14.711,6 11.861,9 -35,2 -19,4

General consolidated budget (EURO) 5.050,0 4.174,1 3.554,3 -29,7 -14,9

TABLE 8

Receivables of the large and medium taxpayers in 2007, in all the country: RON million

Taxpayers Explanations on the origin

of the budgetary receivables

Cashed amounts Outstanding

budgetary receivables to be recovered

total, out of which: 31.675,10 11.861,90in the balance on the end of the previous year 5.288,30 4.849,80

Total per country on 31.12.2007, out of

which: recorded during the reporting year 26.386,80 7.012,10

total, out of which: 5.634,20 1.767,70in the balance on the end of the previous year 1.295,10 719,4 Medium taxpayers on

31.12.2007 recorded during the reporting year 4.339,10 1.048,30

total, out of which: 17,79 14,90in the balance on the end of the previous year 24,49 14,83

Total medium taxpayers at country

level (%) recorded during the reporting

year 16,44 14,95

total, out of which: 11.391,00 1.534,40in the balance on the end of the previous year 526,8 98,2 Large taxpayers on

31.12.2007 recorded during the reporting year 10.864,20 1.436,20

total, out of which: 35,96 12,94in the balance on the end of the previous year 9,96 2,02 Total large taxpayers

at country level (%) recorded during the reporting

year 41,17 20,48


TABLE 9

Amounts cashed following forced execution in 2004, 2005, 2006, 2007

RON million 2007/2004 2007/2005 2007/2006

Budgets 2004 2005 2006 2007 (%) (%) (%)

State budget 2.906,33 3.333,16 3.924,15 7.789,14 268,01 233,69 198,49

Social Security Budget 915,59 1.150,29 1.463,79 2.443,96 266,93 212,46 166,96

Unemployment Fund 123,30 157,75 153,03 232,59 188,64 147,44 151,99

Sole National Health Fund 259,62 425,18 509,50 873,31 336,38 205,40 171,41

Total 4.204,84 5.066,38 6.050,47 11.339,00 269,67 223,81 187,41

TABLE 10

Revenues cashed from the value added tax RON million

TOTAL ANNUAL REALIZED Indicator

2006 % 2007 % 2007/2006

% VAT cashed, out of which: 1=2+3 36.337,86 100,0 38.950,6 100,0 107,2 Amounts cashed from operations internal

2 17.267,36 47,5 33.957,2 87,2 196,7

Amounts cashed from imports of goods

3 19.070,50 52,5 4.993,4 12,8 26,2

Interests and penalties 4 275,92 * 588,9 * 213,5


TABLE 11

Performance indicators - Achievements in 2007

Indicator Indicator denomination Achievements 2007

Objectives 2007

F1 The budgetary revenues collection program fulfillment level 89,14 100

F2 The legal person receivable recovery rate 42,04 25

F3 Large/medium-sized taxpayers' receivables recovery rate 30,08 25

F4 Budgetary revenues collection rate following the forced execution 9,55 10.47

F5 Voluntary compliance level with the payment of the fiscal obligations (value) 78,97 86

F6 Voluntary compliance level with the payment of the fiscal obligations (numerical) 70,59 76

F7 Number of verifications carried out by an inspector 29,09 -

F8 Supplementary amounts collected per inspector 969.064,73 -

F9 The weight of the number of the contestations filed by the taxpayers in the number of taxation decisions issued 5,17 -

F10 Number of information notices on dysfunctions in the taxpayer assistance activity 0,42 -

F11 Number of letters settled in due term 93,08 100

F12 The term processing rate of taxable income statements 96,85 100

F13 The level of the voluntary submission of the taxable income statements on tax types 80,74 95

F14 Settlement rate of the negative V.A.T. balances having option of reimbursement 68,2 100

F15 The rate of the amounts admitted by the courts in the total amount challenged in court 38,05 -

F16

The weight of the decisions to admit or to reject contestation in the total of the decisions delivered by the contestation settlement bodies within A.N.A.F. and the counties' General Directorates of Public Finances.

18,89 -


Table 12 Performance indicators - Objectives in 2008

Indicator Indicator denomination Objectives 2008 (%)

F1 The budgetary revenues collection program fulfillment level (gross values) 100

F2 The budgetary revenues collection program fulfillment level (net values) 100

F3 The legal person receivable recovery rate 25

F4 Receivable collection level from the large/medium-sized taxpayers 25

F5 Budgetary revenues collection rate following the forced execution 10.15

F6 Voluntary compliance level with the payment of the fiscal obligations (value) 80.43

F7 Voluntary compliance level with the payment of the fiscal obligations (numerical) 71.9

F8 Number of verifications carried out by an inspector - F9 Additional (net) amounts collected per inspector -

F10 The weight of the number of the contestations filed by the taxpayers in the number of taxation decisions issued -

F11 Number of information notices on dysfunctions in the taxpayer assistance activity 10

F12 Number of letters settled in due term 100

F13 Weight of the not settled contestations in the total number of contestations 5

F14 The term processing rate of taxable income statements 100

F15 The level of the voluntary submission of the taxable income statements on tax types 95

F16 Settlement rate of the negative V.A.T. balances having option of reimbursement 90

F17 Settlement rate of the negative V.A.T. balances having option of reimbursement, framed in the category of low or medium risk settlements (settled under the condition of carrying out a subsequent control)

100

F18 The rate of the amounts admitted by the courts in the total amount challenged in court -

F19 The weight of the decisions to admit or to reject contestation in the total of the decisions delivered by the contestation settlement bodies within A.N.A.F. and the counties' General Directorates of Public Finances.

-


National Customs Authority

TABLE 1

Results obtained in 2007 by the specialized structures in the control of customs frauds at central/regional/local level:

SAV BV + DJAOV TOTAL

DRAOV FRAUD NUMBE

R FINDINGS CASHING

FRAUD NUMBE

R FINDINGS CASHING

FRAUD NUMBE

R FINDINGS** CASHING*

*

BRASOV 39 7.272 7.267 417 6.074 1.206 456 13.346 8.473 BUCHAREST 69 60.180 1.572 420 1.557 901 489 61.737 2.473

CLUJ 33 3.509 3.094 501 10.664 3.924 534 14.173 7.018 CONSTANTA 34 8.538 361 381 5.473 3.861 415 14.011 4.222

CRAIOVA 45 5.914 2.167 843 5.235 1.683 888 11.149 3.850 GALATI 46 13.062 12.319 203 49.866 920 249 62.928 13.239

IASI 62 27.303 133.070 231 3.756 359 293 31.059 133.429 TIMISOARA 60 11.518 3.342 957 13.544 1.992 1.017 25.062 5.334

TOTAL 388 137.296 163.192 3.953 96.169 14.846 4.341 233.465 178.038

S.A.F.V. 0 0 0 0 0 0 23 8.598 2.395GENERAL

TOTAL 388 137.296 163.192 3.953 96.169 14.846 4.364 242.063 180.433

- data for DJAOV and their subordinated customs offices are reported until September 2007 inclusively - **the amounts include import rights, commissions, excise duties, V.A.T., accessories, fines and the equivalent values of the goods under seizure. Note: DRAOV – Regional Directorate for customs operations and excise duties DJAOV – County Directorate for customs operations and excise duties SAV – Bureau for customs fraud control TABLE 2

Results of the mobile teams in 2007

- RON -

No DRAOV

No of missions carried

out

No of inspections carried out

No of findings

The amount recorded in

the Contravention

Minute

The value of the goods

under seizure

1 BRASOV 763 2441 330 3.829.600 854.0832 BUCHAREST 364 2237 587 4.460.500 4.000.9633 CRAIOVA 1062 4233 356 495.000 970.6424 CONSTANŢA 533 1182 64 96.100 99.9475 CLUJ 672 6318 282 1.000.000 799.0916 IAŞI 170 10336 295 3.278.000 1.079.2587 GALAŢI 298 1520 33 149.500 79.8808 TIMIŞOARA 1432 5017 154 1.540.600 750.071 TOTAL 5294 33284 2101 14.849.300 8.633.935


Financial Guard TABLE 1

Development of the main indicators during the period 2004 - 2007

- RON thousand- Explanations 2004 2005 2006 2007

No of verified economic agents 139.420 146.643 148.584 153.350

No of control documents drafted 127.550 138.902 143.437 135.982

I. TOTAL AMOUNTS: -established 272.100 286.497 281.943 376.805-cashed 98.300 132.098 151.690 189.544out of which: Fines

-established 108.200 169.400 192.606 272.983-cashed 89.600 123.059 138.848 178.583Seizures -established 163.900 117.097 89.337 103.822-cashed 8.700 9.039 10.386 10.817II. CRIMINAL INFORMATION NOTICES - number 1.720 2.009 2.334 2.375- value of the damages 361.600 697.104 745.773 1.400.023

TABLE 2

Additional measures to the acts carried out, compared to those from the reference period:

Indicators

2006

2007

%

Units with functioning suspended acc. to Government Emergency Ordinance (OUG) 28/99 2.027 6.873 339

Units with functioning suspended acc. to article 220 of the Fiscal Procedure Code 418 1.480 354

Alcohol and alcoholic drinks confiscated (liter) 110.400 417.377 378

Cigarettes confiscated (packages) 312.792 2.321.005 742


CONTENTS INTRODUCTION Page1. A.N.A.F. - a fiscal agency in development 52. A.N.A.F. in 2007, brief presentation 8

I. TAX ADMINISTRATION 10 I.1. A.N.A.F. MODERNIZATION 12 1.2. Organizational reform of the fiscal administration 12 1.3. A fiscal administration focused on the services provided to the taxpayers 14

1.3.1. Taxpayer assistance and guidance 141.3.2. Simplified and modernized fiscal procedures 17

I.2. COLLECTION OF THE BUDGETARY REVENUES 19 2.1. A faster and more efficient collection 19 2.2. Receivable recovery Forced execution. 21 I.3. COMMITMENT TO ENSURE EQUAL TREATMENT OF THE CITIZENS. Efficient control of fiscal evasion 23 l.4. IMPROVEMENT OF THE A.N.A.F. FUNCTIONING 26 4.1. Strategic planning

ANAF Strategy for 2007-2011 – implementation of the objectives in the first year of the strategy period

26

B. Communication strategy 26 C. Annual performance planning - Annual plans 27 D. Estimation of the budgetary revenues – important premise for the substantiation of the annual plans

29

4.2. Computerization – factor of the A.N.A.F. reform and modernization 29 4.3. Human resources, premise of the success 30 4.4. Development of the institutional relationships. Opening for external cooperation

31

4.5. Internal activity audit 32 4.6. Public communication 32

II. NATIONAL CUSTOMS AUTHORITY 34 Customs activity in 2007 - an activity at the community standard level 36

III. FINANCIAL GUARD

42

Financial Guard in 2007 – stimulation of the fiscal evasion control 42 IV. A.N.A.F., in the context of the National Anticorruption Strategy 45 V. OBJECTIVES FOR 2008 AND MEDIUM-TERM PERSPECTIVES 47

VI. STATISTICS REPORTS 50

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