Taxes collected in January-April in Romania increased by 1.1% y/y to RON66.62bn (€14.8bn), 3% above target, tax collection agency ANAF announced on May 6.
The result was backed up by an intensification of the agency’s fight against tax evasion and came despite massive VAT cuts - a 4pp cut in the general VAT rate as of January plus a 19pp cut in VAT for food last June, ANAF commented. ANAF said it has stepped its struggle against tax evasion in recent months, by increasing the number of checks performed at companies.
However, according to our calculations based on Q1 data reported by ANAF on April 21, collection was actually more than 7% below target in April. The taxes collected in Q1 were 7% above target (and 6% up y/y), at RON47.8bn. One month later - in April - the agency said the target was overshot by only 3% during the first four months of the year.
The deviation from target in April was was caused by VAT collection that was 17% below target (RON3.66bn vs. RON4.42bn target) in the month, according to our calculations.
In Q1, VAT collection was still 10% above target due to robust performances in January.
The disappointing VAT collection in February-April might be due to the VAT rate cut in January (visible in VAT collection from February) or to the change in the ANAF management. In a post on his blog, former ANAF head Gelu Diaconu blames the new management, appointed by Finance Minister Anca Dragu, for the low VAT collection and for the disappointing tax collection in April.
ANAF published only January-April data, with no comments on April collection.
|Tax Collection [RON bn]|
|Q1-16||y/y||vs target||Apr-16||y/y||vs. target||4M 2016||y/y||vs target|
|Source: FinMin, IntelliNews calculations|