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Moldova’s Tax Department Seeks to Boost Compliance and Reduce Risk Through Improved Strategies

July 26, 2012

In a bid to enhance its revenue collection efforts and minimize risk exposure, Moldova’s tax department has been implementing the compliance risk model (CRM) since 2011. The CRM has yielded positive results, with an increase in extra revenue collected during the year under review.

However, assessments suggest that for long-lasting impact, further improvements are required in key areas such as taxpayer services, audit functions, tax fraud investigations, information technology infrastructure, and the value-added tax refund system.

2012 Compliance Plan: Targeting Wealthy Individuals

According to a recent report, the tax department’s compliance plan for 2012 focuses on implementing targeted measures aimed at wealthy individuals. The strategy aims to increase revenue collection through more effective risk management and compliance strategies, ultimately reducing the country’s reliance on indirect taxes.

Addressing Systemic Weaknesses for Long-Term Success

The report notes that while the CRM has shown promise, its full potential can only be realized by addressing systemic weaknesses in key areas. By improving taxpayer services, enhancing audit capabilities, strengthening tax fraud investigations, upgrading information technology systems, and overhauling the value-added tax refund system, Moldova’s tax department can better manage compliance risks and enhance revenue collection.

Key Areas for Improvement

• Taxpayer Services: Improve responsiveness to taxpayer needs
• Audit Functions: Enhance capabilities to detect and prevent tax evasion
• Tax Fraud Investigations: Strengthen investigative procedures and resources
• Information Technology Infrastructure: Upgrade systems to improve efficiency and accuracy
• Value-Added Tax Refund System: Streamline refund process to reduce delays

Country Reports Series: Identifying Best Practices for Public Financial Management

The report is part of a larger series of country reports that provide in-depth analysis of public financial management issues in various countries. The reports aim to assist policymakers and stakeholders in identifying best practices and implementing effective solutions to improve public finance outcomes.