A report of the International Monetary Fund (IMF) observes that Moldova should further strengthen the tax administration component to have a long-lasting impact of the Customer Relationship Management (CRM).
“Addressing the remaining shortcomings in a range of key tax administration areas puts a significant focus on training and also requires considerable TA in excess of what can be provided by the Fund; in particular this is the case with the much needed IT reform,” the IMF report shows.
The financial organization emphasizes the need to bolster the taxpayer services, as well as being used to promote compliance. Improved compliance will imply enhanced audit skills. The report suggests the auditors to learn to recognize unreported income and identify tax evasion and aggressive tax avoidance.
“Filling these knowledge gaps will require a higher level of technical training over a sustained period,” the report pointed out.
Another recommendation of the IMF is to improve the organizational structures. It supports the State Tax Inspectorate (STI) management which intends beginning a rationalized regional structure. The strategy will enhance the handling of the STI’s risk portfolio by placing staff where they are needed the most. The indirect audit methods will take effect in 2013.
The same IMF report suggests that the handling of the Value Added Tax (VAT) also needs enhancement.
“VAT control will benefit from improved audit training and better risk analysis. The large-scale VAT refund audit program shows little wrongdoing by taxpayers. Other countries (including some of Moldova’s neighbors) achieve similar levels of VAT security using risk-based methods at far lower costs in terms of staff time,” the report shows. It also states that the current system has gained many liabilities for the Government to the detriment of businesses.