EY Romania Survey: The lacunar legislative framework - the main challenge faced by Romanian taxpayers in meeting their obligations to the Environment Fund

EY Romania Survey: The lacunar legislative framework - the main challenge faced by Romanian taxpayers in meeting their obligations to the Environment Fund

Identifying all tax contributions to the Environmental Fund Administration (AFM) is still a major problem among companies, although the provisions on these taxes and contributions have been in place since 2005, according to an EY Romania survey conducted in June 2019.

The survey aimed to measure the impact of the latest legislative changes on the Romanian business environment, with specific reference to contributions and taxes to the Environment Fund and taxpayers' expectations in their relationship with competent authorities.

A percentage of 97% of respondents believe that the current legislative framework on contributions to the Environment Fund is unclear and not correlated with economic reality.

Asked about the main challenges they face in fulfilling their legal obligations regarding taxes and contributions to the AFM, the participants mentioned the lacunar legislative framework, but also the relationship with the competent authorities, which does not provide concrete information, and the responses submitted also refer to the articles in the legislation.

Regarding the contribution of 2 lei / kg for the packaging placed on the national market, 54% of the respondents mentioned that the determination of the quantities of packaging is made by estimating documents (by calculating the difference between the gross value and the net value based on the CMRs etc.).

Only 22% calculate this contribution based on the packaging weighing processes, which is recommended as one of the safest calculation methods.

Asked if they have the certainty that they have identified all the obligations to AFMs that follow their activity, only 51% of the respondents answered in the affirmative.
At the same time, only 16% of the participants believe that, in the case of a tax inspection by the Environmental Fund Administration, no additional payment will be required.

Also, the EY Romania survey revealed that, in the current context, the automation of tax assessment processes to the Environmental Fund is a necessity.

Thus, 82% of respondents believe that using an IT application would help them manage their packs more effectively.

The importance of automating these processes has been signaled by the fact that determining contributions is a time consuming and resource-intensive exercise, and identifying the computing database may involve several departments and, at the same time, possessing both technical and legal and fiscal data and information

"The challenges raised by our customers are the same from one year to another.This study confirms that most companies are not prepared to face fiscal scrutiny on contributions to the Environment Fund. Frequent changes in legislation represent a continuous challenge for the business environment and the identification of possibilities for data flow procedures and automation should be a priority for taxpayers, "said Laura Ciobanu, Manager, Environmental Consultancy, EY Romania.

According to the survey, 31% currently use a form of automation in the process of determining, calculating and declaring liabilities. Of these, 52% use Excel spreadsheets, 19% have an independently developed application dedicated to packaging alone, and 29% use an integrated application in the current management system.