## 1mdaea2022008 — TADAT Assessment of the State Tax Service of the Republic of Moldova ## Source details **Canonical URL:** [1mdaea2022008 — TADAT Assessment of the State Tax Service of the Republic of Moldova](https://www.imf.org/-/media/files/publications/cr/2022/english/1mdaea2022008.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2022/english/1mdaea2022008.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2022/english/1mdaea2022008.pdf.json) --- ### PREFACE: assessment scope and team - Assessment period: September 19 to October 4, 2022. - Tool used: Tax Administration Diagnostic Assessment Tool (TADAT). - Purpose of TADAT: provides an assessment baseline of tax administration performance for reform priorities and repeat-assessment tracking. - Assessment team: - Mr. Enriko Aav - Ms. Jimena Acedo - Mr John Crotty - Ms. Lucilla McLaughlin - Key institutional meetings: - Mr. Dumitru Budianschi, Minister of Finance - Ms. Rosalina Albu, Director General of State Tax Service (STS) - Managers and key staff of the STS - Acknowledged support: - Mses. Mihaela Doros; Irina Lupasco - Report process: - Draft presented to STS at close of in-country assessment. - Written comments from STS considered and reflected as appropriate. - PAR reviewed and cleared by the TADAT Secretariat. ### Executive summary — strengths and weaknesses - Strengths - Good Service provision on the website - Wide use of e-payments and increasing e-filing - Well-developed processes for Institutional Risk Management and Business Continuity Planning - Good dispute resolution mechanism - Strong communication channel with tax Intermediaries - Emerging focus on taxpayer compliance costs - Strong tools for consistency in audit practice (Audit Quality Review, Manuals) - Weaknesses - Outdated IT systems do not deliver the functionalities needed for modern tax administration - Absence of automated data exchange for risk management - Immature compliance risk management to identify and manage compliance risks, and prioritize risks and risk treatments - Lack of risk-based approach in VAT refunds - Poor practice in planning and monitoring of the audit program - Inadequate taxpayers register with over-reliance on the PSA - Limited effectiveness of tax accounting ### Summary operational implications - STS progress: enhanced taxpayer services, stable dispute resolution, new tools for improving tax audit quality. - Business continuity: recently established processes reduce operational and human capital risks. - Main constraints limiting performance improvement: - Immature compliance risk approach. - Deficiencies in IT systems, including lack of automatic exchange of data with external sources. - Poor quality of taxpayer register impeding targeting. - Too many priorities in tax compliance planning and absence of a specific compliance strategy for the large taxpayer segment. ### TADAT framework and assessed taxes - Nine performance outcome areas (POAs) and 32 high level indicators scored A–D. - Major taxes assessed: corporate income tax (CIT), personal income tax (PIT), value added tax (VAT), domestic excise tax (category contributing 70 percent of domestic excise revenue by value), and Pay As You Earn (PAYE). - Assessments are evidence-based to identify system health and reform priorities. ### Key POA indicator scores (Indicator — Score) - P1-1 Accurate and reliable taxpayer information — D - P1-2 Knowledge of the potential taxpayer base — C - P2-3 Identification, assessment, ranking, and quantification of compliance risks — C - P2-4 Mitigation of risks through a compliance improvement plan — C - P2-5 Monitoring and evaluation of compliance risk mitigation activities — C - P2-6 Management of operational risks — C - P2-7 Management of human capital risks — D - P3-8 Scope, currency, and accessibility of information — B - P3-9 Time taken to respond to information requests — A - P3-10 Scope of initiatives to reduce taxpayer compliance costs — D - P3-11 Obtaining taxpayer feedback on products and services — C - P4-12 On-time filing rate — B - P4-13 Management of non-filers — D - P4-14 Use of electronic filing facilities — C - P5-15 Use of electronic payment methods — A - P5-16 Use of efficient collection systems — A - P5-17 Timeliness of payments — B - P5-18 Stock and flow of tax arrears — C+ - P6-19 Scope of verification actions taken to detect and deter inaccurate reporting — D - P6-20 Use of large-scale data-matching systems to detect inaccurate reporting — D - P6-21 Initiatives undertaken to encourage accurate reporting — B - P6-22 Monitoring the tax gap to assess inaccuracy of reporting levels — C - P7-23 Existence of an independent, workable, and graduated dispute resolution process — A - P7-24 Time taken to resolve disputes — B - P7-25 Degree to which dispute outcomes are acted upon — A - P8-26 Contribution to government tax revenue forecasting process — B - P8-27 Adequacy of the tax revenue accounting system — D - P8-28 Adequacy of tax refund processing — D - P9-29 Internal assurance mechanisms — B - P9-30 External oversight of the tax administration — C+ - P9-31 Public perception of integrity — C - P9-32 Publication of activities, results and plans — B ### Select indicator operational notes and exact figures - P1-1 (D): All filing and payment obligations are not specified in the State Tax Register (STR). No assurance reports on accuracy of the VAT sub-registry. - P2-3 (C): No evidence that data from a range of external sources is gathered and interpreted; compliance planning exists but not part of multi-year strategic/operational planning. - P3-9 (A): Almost 98 percent of taxpayers’ calls to the STS call-center are answered within 6 minutes. - P4-14 (C): Electronic filing high for VAT, CIT, PAYE, but only 21.2 percent for PIT. - P5-15 (A): All core taxes administered by the STS must be and are paid electronically. - P5-18 (C+): Core tax arrears amount to more than 20 percent of total core tax collections; collectable arrears are below 5 percent of total core tax collections; value of core tax arrears more than 12 months old exceeds 75 percent of the value of all core tax arrears. - P6-19 (D): Only a small proportion of audits are centrally selected on the basis of risk; no operational plan for audit with KPIs. - P6-20 (D): STS IT weaknesses and lack of interoperability hinder automated crosschecking. - P7-23 (A): Three-stage review and appeal process; Appeals division independent of audit. - P8-27 (D): Posting of payments to the taxpayer’s current account often takes longer than three business days. - P8-28 (D): No automated risk-based verification system for VAT refund claims. - P9-29 (B): Audit trails of user access and changes to taxpayer data are in place; system-generated surveillance tools not widely used. ### Country context and economic outlook (selected exact figures) - Human Development Index: 0.767. - Gross national income per capita: USD 5,440. - Population: 2.6 million. - Remittances: about a fifth of GDP. - Trade: over 60 percent of exports go to the EU; around 50 percent of imports come from the EU. - EU membership steps: applied March 2022; candidate status granted June 23, 2022 (contingent on reforms). - Economic performance projections: economy projected to stagnate in 2022; GDP grew by 1.1 percent in the first quarter (year-to-year), quarter-to-quarter contraction of 6.4 percent. - Unemployment rate: increased to 3 percent in 2022 Q1 (from 2.6 percent in 2021 Q4). - Fiscal pressures: impacts from war in Ukraine, high energy and food prices, refugee accommodation costs; risks tilted to the downside. ### Main taxes and revenue composition (2021 exact shares) - VAT: 36.1 percent of total tax revenues - Social and health fund contributions: 31.5 percent of total tax revenues - Excises: 10.8 percent of total tax revenues - CIT: 8.4 percent of total tax revenues - PIT: 7.4 percent of total tax revenues - Combined tax and social contribution revenues in 2021 amounted to 29.2 percent of GDP (further numerical detail in Attachment III). ### Institutional framework and reform status - STS restructured from April 2017 into a single legal entity merging previous inspectorates. - STS is organizationally within the Ministry of Finance (MoF); MoF sets objectives and approves structure and budget. - Core functions centralized in four territorial offices: Center, South, North, and Chisinau; local offices focus on taxpayer services. - Large Taxpayer Office (LTO) exists (General Department for Administration of Large Taxpayers (GDALT)) plus centralized call center. - Staffing complement: 1,931. - IT overhaul financed by the World Bank; other partners include US Treasury OTA, Swedish Tax Administration, IMF. - Government preparing wider tax policy reform with tax administration implications. ### International information exchange - Joined Global Forum on Transparency and Exchange of Information for Tax Purposes on October 27, 2016 (136th member). - Second Round Phase 1 Peer Review Report published November 25, 2021. - As of peer review, Moldova could exchange information with 148 partners through 47 double taxation conventions and the Multilateral Convention. ### POA 1 — Integrity of the Registered Taxpayer Base (selected findings) - STR limitations: - All filing and payment obligations not specified in STR; STR does not indicate whether annual CIT or PIT return required for PSA-assigned IDNOs. - Withholding Tax obligations not recorded in STR. - STR includes separate sub-registers for VAT and excise obligations. - STR cannot modify PSA-held registration data; PSA is principal data source and daily transmitter of IDNOs. - STR does not record identities of related entities/parties, does not interface with STS filing and payment systems, and cannot archive deregistered taxpayers. - Identity verification gaps: STS does not verify identities of directors and shareholders (PSA responsible). - Register cleanup actions: - STS preparing to de-register up to 95,000 peasant farmers under Law No. 51 of 10-03-2022. - STS removed more than 60,000 individual taxpayers from the register in 2019-2021. - STS removed more than 35,000 taxpayers from the obligation to file PAYE withholding declarations during 2019-2022. - New tax register expected operational at end of calendar year 2022 with capabilities to identify liabilities, integrate third-party data, merge Multiple TINs, and archive deregistered data; STS will remain dependent on PSA. ### POA 2 — Effective Risk Management (selected findings) - Compliance risk practices: - No evidence of systematic external data gathering and interpretation for risk identification. - Annual risk approach exists; methodology prescribed by STS Order number 107 of 2015 (updated annually). - Risk register categories: General risks (14), specific risks (27), VAT risks (21), large taxpayer risks (27). - Annual plans contain too many priorities and lack ranking/prioritization and medium-term mitigation strategies. - Compliance Program: - Proposes graduated responses but lacks details on number/mix of treatments and resources. - No specific strategy for large taxpayers, despite contributing up to 36 percent of total tax revenue (Taxpayer Compliance Program 2022). - Monitoring and evaluation: - Compliance Risk Committee established November 2017 but met only twice recently; not active in 2022 at assessment time. - Quarterly and annual reports prepared showing variations in tax payments and arrears after voluntary compliance treatments, but causal attribution not well established. - Cost benefit analysis of voluntary compliance interventions conducted in 2020. - Operational risks and BCP: - Risk Register includes 45 operational risks; "risk passports" with business impact analyses developed. - Business Continuity Plans (BCP) developed for fire, IT, gas supply; fire drills and ICT continuity exercises conducted December 2021. - Guidelines and IT tools developed to support remote work (notebooks, database access, e-signature). - Human capital risk: - HCR structures exist but no independent third-party HR review in last seven years. - Ten HR-related risks in register; HCR evaluated every six months by Institutional Risk Committee. - P2-7 scoring dimensions: P2-7-1 M1 D D; P2-7-2 B. ### POA 3 — Supporting Voluntary Compliance (selected findings) - Information and accessibility: - STS website is main information source; provides calendar of deadlines and categorized information by taxpayer type. - Large searchable database: Generalized Basis of Tax Practice (tax precedents). - Website not specifically tailored to large taxpayers or all disadvantaged groups; has sight-impairment accessibility. - Small unit (two technical staff) tasked with keeping website information current per SFS order no. 285 of 2021. - Contact responsiveness: - Call center operated by Center of IT in Finance (CITF); almost 98 percent of calls answered within 6 minutes (12-month total: 137 297 calls; 134 286 answered within 6 minutes; 97.8 percent). - Law requires government agencies to respond within 30 days; taxpayers’ charter does not set a timeliness standard. - Reducing compliance costs: - Score P3-10: M1 D — STS does not routinely review common mistakes and misinterpretations encountered by front-line staff. - Simplification/digitization in place: VEN12 (10 pages); SIMM20 (one-page form); AI17 (simpler form); prefilling of PIT annual returns for taxpayers with employers. - All taxpayers have secure 24-hour access to tax accounts; small 2021 survey indicated high satisfaction. - Taxpayer feedback: - Six taxpayer perception surveys in past twelve months; sample sizes 132 to 2,313; results published on STS website. - Active Facebook page Contabili News with exchanges with ~12,000 tax intermediaries; bi-monthly meetings with representatives. - Third-party survey by Magenta Consulting in January 2019: 464 enterprises and 85 large taxpayers; repeat under TAMP program in 2022. ### POA 4 — Timely Filing of Tax Declarations (selected exact figures) - On-time filing rates (selected exact figures for 2021): - CIT on-time filing rate: 81.1 percent (70 474 filed on-time of 86 921 expected). Large taxpayers CIT on-time: 97.6 percent (534/547). - PIT on-time filing rate: 84.3 percent (25 902 filed on-time of 30 726 expected). - VAT on-time filing rates (12-month total July 2021–June 2022): 93.7 percent (177 215 filed on-time of 189 068 expected). - VAT large taxpayers on-time filing (12-month total): 98.6 percent (3 202/3 248). - Domestic excise (categories contributing 70 percent by value) 12-month total: 84.0 percent (1 506/1 792). - PAYE withholding on-time filing 12-month total: 78.2 percent (635 681 filed on-time of 812 416 expected). - Electronic filing rates (In percent of all declarations filed): - CIT: 2019 63.3; 2020 65.9; 2021 70.4; 6 months 2022 75.7 - PIT: 2019 14.1; 2020 17.3; 2021 21.2; 6 months 2022 26.4 - PAYE: 2019 80.0; 2020 87.7; 2021 89.0; 6 months 2022 88.6 - VAT: 2019 99.9; 2020 99.9; 2021 99.95; 6 months 2022 99.95 - Domestic excise tax: 2019 99.0; 2020 99.0; 2021 99.2; 6 months 2022 99.0 - Large taxpayers (all core taxes): 2019 100.0; 2020 100.0; 2021 100.0; 6 months 2022 100.0 ### POA 5 — Timely Payment and Arrears (selected exact figures) - Electronic payments: 2019–2021 and 6 months 2022 — 100.0 percent of number and value of payments for all core taxes are electronic. - VAT payments on-time (2021 by number): All VAT payers 96.7 percent; Large VAT payers 98.8 percent. - VAT payments on-time (2021 by value): All VAT payers 98.1 percent; Large VAT payers 98.8 percent. - Tax arrears (value, millions MDL): - Total core tax collections (A): 2019 48 132.5; 2020 48 583.8; 2021 58 879.1 - Total core tax arrears (B): 2019 1 060.5; 2020 1 394.2; 2021 1 858.5 - Collectible (C): same as B in table above - More than 12 months old (D): 2019 457.3; 2020 576.0; 2021 598.3 - Arrears ratios (In percent): - Ratio of (B) to (A): 2019 2.2; 2020 2.9; 2021 3.2 - Ratio of (C) to (A): 2019 2.2; 2020 2.9; 2021 3.2 - Ratio of (D) to (B): 2019 43.1; 2020 41.3; 2021 32.2 - Key drivers of aged arrears: backlog of insolvency cases requiring civil courts and cases under criminal proceedings preventing liquidation. ### POA 6 — Verification, Audits, and Analytics (selected findings) - Audit program: - Annual planned audits ~1,150 (95 for GDALT) with reserve of ~6,000 mandatory audits (including 442 for GDALT). - Central selection of audits ordered as of January 2022 (Order no. 141 of November 30, 2021) but not yet observed in effect. - Audit manual comprehensive and frequently updated; Chapter 11 of Tax Code prescribes audit procedures and time limits. - Audit quality review system introduced in 2020 with three-level review and an 11-criteria checklist; findings presented quarterly. - Audit plan does not set KPIs for audit yield, strike rate, or timeliness; impact on compliance not routinely measured. - Data-matching and analytics: - No large-scale automated crosschecking of bulk data against tax declarations due to IT and interoperability barriers (P6-20 Score D). - Example POLMED17 matched to customs via Business Intelligence query but not automated. - STS developing RA-GAP skills; FAD RA-GAP 2021 indicates trade, transport, construction, and manufacturing contribute most to potential VAT gap; results not yet in compliance planning. - Proactive rulings: - Public binding rulings database (Generalized Basis of Tax Practice) is robust. - Private advance rulings exist under Article 1361 for a fee (60,000 MDL for a large taxpayer; 30,000 MDL for others) but rarely requested (one private ruling ever issued). - No cooperative compliance arrangements; P6-21 Score B. ### POA 7 — Dispute Resolution (selected exact figures) - Three-stage review and appeal process: STS Appeals Department / Disputes Resolution Council; court; Court of Appeal (P7-23 Score A). - Administrative reviews performance July 2021–June 2022: - Example July 2021: Stock beginning 34; Received 27; Finalized 38; Stock end 23; Finalized within 30 days 29 (47.5 percent of total during month). - 12-month aggregated figures presented in Attachment III. - Administrative reviews: more than 90 percent completed within 60 days; 80.8 percent finalized within 30 days (P7-24 Score B). - Appeals Department prepares monthly reports with procedural and legislative change proposals (P7-25 Score A). ### POA 8 — Revenue Accounting and VAT Refunds (selected exact figures) - Contribution to forecasting: STS provides regular input to MoF and monitors collections monthly (P8-26 Score B). - Revenue accounting IT system adequacy: P8-27 Score D — manual posting persists and can exceed three business days. - VAT refunds (July 1, 2021 – June 30, 2022 exact figures): - Total VAT refund claims received: Number 3 039; Value MDL 4 564.31 million - Total VAT refunds paid: Number 2 714; Value MDL 3 849.18 million - Paid within 30 days: Number 2 031; Value MDL 2 388.64 - Paid outside 30 days: Number 683; Value MDL 1 460.54 - Total VAT refund claims declined: Number 125; Value MDL 457.68 - Declined within 30 days: Number 118; Value MDL 454.73 - Declined outside 30 days: Number 7; Value MDL 2.95 - Total VAT refund claims not processed: Number 200; Value MDL 257.46 (approved but not yet paid or offset) - Ratio of (paid within 30 days + declined within 30 days) to total claims (B + C) to (A): 70.71 (Number) and 62.3 (Value) (In percent) - VAT refund process: no automated risk-based verification; refund selection manual; decision within three days whether pre-refund or post-refund verification; all claimants audited at least once a year. - Legal deadline for VAT refund claims processing: 45 days. Interest on delayed refunds must be claimed by taxpayers; no evidence of claims. ### POA 9 — Accountability, Oversight, and Integrity (selected findings) - Internal Audit: - Independent IA unit reporting to STS head; strategic IA plans 2022–2024. - At least one IT operations audit annually. - 3 of 5 IA staff included in Register of Certified Public Sector Internal Auditors (P9-29 Score M2 C / B). - Staff integrity: - Code of Conduct signed by all staff. - Internal Security and Anticorruption Unit (ISAU) with four staff reporting to STS head; quarterly statistics published (P9-29-2 Score A). - External oversight: - Court of Accounts audits STS annually; reports and responses published on STS website (P9-30 Score M2 A / C+). - No external authority dedicated to investigate taxpayer complaints about STS; Ombudsman focuses on human rights; anticorruption prosecutor investigates serious tax official corruption (P9-30-2 Score D). - Public perception: - Independent survey 2018: 1,026 individuals and 549 legal entities; results published May 2019. - Online survey Sep–Oct 2021 had only 132 responders and does not qualify for TADAT scoring (P9-31 Score M1 C). - Publication: - Annual reports published within six months of fiscal year-end; budget execution details published three months after reporting period. - STS Strategic Plan 2021–2023 published July 2021; 2022 annual plan published May 2022 (P9-32 Scores M2 A / B and C). ### Country snapshot and selected exact statistics (from Attachment III) - Geography: 33,851 sq. km. - Usual resident population as of January 1, 2022: 2,603,813. - Adult literacy rate: 99.4 percent. - GDP April 2022 current prices: USD 13.81 billion USD. - Per capita GDP April 2022 current prices: USD 5.44 thousand. - Internet users per 100 people (2017): 76. - Tax-to-GDP for 2021: 29.2 percent; VAT is 10.5 percent of GDP; Social & Health Contributions are 9.2 percent of GDP. - Number of taxpayers as at end-2021: - CIT: 135,073 - PIT: 150,610 - PAYE: 96,130 - VAT: 30,775 - Domestic excise tax: 150 - Number of staff in main collection agency: 1,931 - Financial year: Calendar year ### Selected tax revenue and movement figures (exact values) - National budgeted tax revenue forecast administered by STS: 2019 39 063.2; 2020 39 267.9; 2021 45 800.0 (Million MDL) - Tax revenue collections administered by STS: 2019 39 135.1; 2020 40 517.5; 2021 47 285.4 (Million MDL) - Corporate income tax (CIT) collections: 2019 5 266.0; 2020 5 030.4; 2021 5 905.4 (Million MDL) - Personal income tax (PIT) collections: 2019 4 132.0; 2020 4 323.5; 2021 5 307.7 (Million MDL) - VAT — gross domestic collections: 2019 7 633.5; 2020 7 813.3; 2021 8 918.3 (Million MDL) - VAT — collected on imports: 2019 15 454.4; 2020 14 914.2; 2021 19 614.6 (Million MDL) - VAT and Excises refunds — administered by MF: 2019 -2 930.8; 2020 -2 968.7; 2021 -3 051.2 (Million MDL) - Excises on domestic transactions: 2019 555.0; 2020 570.9; 2021 903.8 (Million MDL) - Social insurance contributions (STS and NSIH): 2019 13 791.3; 2020 14 516.2; 2021 16 522.2 (Million MDL) - Health insurance contributions (STS and NHIC): 2019 4 822.7; 2020 5 008.8; 2021 5 705.0 (Million MDL) - Total tax revenue collections (percent of GDP): 2019 27.5; 2020 29.3; 2021 29.2 ### Organizational structure (selected roles and departments) - Director: Rozalina ALBU - Deputy Directors: Petru Griciuc; Iuri LICHII; Valeriu VLAS; Victoria Belous (Gh) - Key departments: Internal Audit Department; Human Resources Management Department; Informational Development Department; Taxpayer Service General Department; Large Taxpayers Administration General Department; Appeals Department; Internal Security and Anti-Corruption Department; Recovery of Arrears General Department; among others. ### Attachment highlights — sources of evidence (selected) - P1-1: Register report as at 31.1.2022; Register report as at 31.8.2022; Instructions for deregistering taxpayers; Tax Register Modernization Plan. - P2-3: Risk Register published September 2022; Methodology classifying compliance risks 11.05.2021; Strategic Plan 2021–2023; Taxpayer Compliance Program 2022. - P2-6: Methodology for risk management in STS and 6 annexes; Business continuity plans; Internal Audit Report on Business Continuity September 2022. - P3-8: Guide for new taxpayers; Business process updating website. - P4-12 / P5-15 / P6-19 / P6-20 / P8-28 / P9-29 / P9-30: Numerical tables and procedural documents listed in Attachment III and Attachment V. *Source: 1mdaea2022008 — Extracted content from IMF TADAT assessment PDF provided in the input.* ### PREFACE ................................................................................................................ ### PREFACE ### Assessment period and tool - The assessment of the system of tax administration of the Republic of Moldova was undertaken during the period September 19 to October 4, 2022. - The assessment used the Tax Administration Diagnostic Assessment Tool (TADAT). - Purpose of TADAT: provides an assessment baseline of tax administration performance that can be used to determine reform priorities, and, with subsequent repeat assessments, highlight reform achievements. ### Assessment team - The assessment team comprised: - Mr. Enriko Aav - Ms. Jimena Acedo - Mr John Crotty - Ms. Lucilla McLaughlin ### Meetings and institutional engagement - The team met with: - Mr. Dumitru Budianschi, Minister of Finance - Ms. Rosalina Albu, Director General of State Tax Service (STS) - A number of managers and key staff of the STS - The team acknowledges the great support provided by: - Mses. Mihaela Doros, Head of Organizational Management Department of the STS - Irina Lupasco, Head of Section in Organizational Management Department of the STS ### Report process and validation - A draft performance assessment report was presented to the STS of the Republic of Moldova at the close of the in-country assessment. - Written comments since received from STS on the draft report have been considered by the assessment team and, as appropriate, reflected in this final version of the report. - The PAR has been reviewed and cleared by the TADAT Secretariat. *Source: 1mdaea2022008 - PREFACE* ### EXECUTIVE SUMMARY ### EXECUTIVE SUMMARY ### Strengths and weaknesses of the Moldova tax administration - Strengths - Good Service provision on the website - Wide use of e-payments and increasing e-filing - Well-developed processes for Institutional Risk Management and Business Continuity Planning - Good dispute resolution mechanism - Strong communication channel with tax Intermediaries - Emerging focus on taxpayer compliance costs - Strong tools for consistency in audit practice (Audit Quality Review, Manuals) - Weaknesses - Outdated IT systems do not deliver the functionalities needed for modern tax administration - Absence of automated data exchange for risk management - Immature compliance risk management to identify and manage compliance risks, and prioritize risks and risk treatments - Lack of risk-based approach in VAT refunds - Poor practice in planning and monitoring of the audit program - Inadequate taxpayers register with over-reliance on the PSA - Limited effectiveness of tax accounting ### Summary assessment and operational implications - The State Tax Service (STS) has made good progress in enhancing services to taxpayers, including a stable dispute resolution process and new tools for improving tax audit quality. - Recent establishment of business continuity processes reduces operational and human capital risks and shows preparedness to manage external hazards. - STS has begun efforts to reduce compliance costs for taxpayers, but the absence of a routine to review common taxpayer mistakes and legal misinterpretations has negatively impacted the assessment score for supporting voluntary compliance. - The main constraints limiting improved tax administration performance: - Immaturity of the compliance risk approach. - Deficiencies in IT systems, including lack of automatic exchange of data with external sources. - Poor quality of the taxpayer register impeding better targeting of taxpayers with major compliance issues. - Too many priorities in tax compliance planning and absence of a specific compliance strategy for the large taxpayer segment. ### Verification, audit, and VAT refund performance - Moving tax audit and other verification activities towards a genuinely risk-driven approach is a challenge for the STS. - Although some excellent practices in tax audit work have been implemented, a low proportion of centrally selected risk-based audits and lack of evidence on managing audit program effectiveness reduced the verification performance score. - Slow VAT refunding demonstrates STS’s low capacity in applying risk-based practices. ### TADAT scoring framework and overview - Scoring is structured around the TADAT framework’s nine performance outcome areas (POAs) and 32 high level indicators; an ‘ABCD’ scale is used with ‘A’ highest and ‘D’ lowest. - TADAT assesses major taxes: corporate income tax (CIT), personal income tax (PIT), value added tax (VAT), domestic excise tax (focusing on the category contributing 70 percent of domestic excise revenue by value), and Pay As You Earn (PAYE). - TADAT assessments are evidence based and provide an objective assessment of system health, reform needs, and priorities. ### Key POA indicator scores (Indicator — Score) - P1-1 Accurate and reliable taxpayer information — D - P1-2 Knowledge of the potential taxpayer base — C - P2-3 Identification, assessment, ranking, and quantification of compliance risks — C - P2-4 Mitigation of risks through a compliance improvement plan — C - P2-5 Monitoring and evaluation of compliance risk mitigation activities — C - P2-6 Management of operational risks — C - P2-7 Management of human capital risks — D - P3-8 Scope, currency, and accessibility of information — B - P3-9 Time taken to respond to information requests — A - P3-10 Scope of initiatives to reduce taxpayer compliance costs — D - P3-11 Obtaining taxpayer feedback on products and services — C - P4-12 On-time filing rate — B - P4-13 Management of non-filers — D - P4-14 Use of electronic filing facilities — C - P5-15 Use of electronic payment methods — A - P5-16 Use of efficient collection systems — A - P5-17 Timeliness of payments — B - P5-18 Stock and flow of tax arrears — C+ - P6-19 Scope of verification actions taken to detect and deter inaccurate reporting — D - P6-20 Use of large-scale data-matching systems to detect inaccurate reporting — D - P6-21 Initiatives undertaken to encourage accurate reporting — B - P6-22 Monitoring the tax gap to assess inaccuracy of reporting levels — C - P7-23 Existence of an independent, workable, and graduated dispute resolution process — A - P7-24 Time taken to resolve disputes — B - P7-25 Degree to which dispute outcomes are acted upon — A - P8-26 Contribution to government tax revenue forecasting process — B - P8-27 Adequacy of the tax revenue accounting system — D - P8-28 Adequacy of tax refund processing — D - P9-29 Internal assurance mechanisms — B - P9-30 External oversight of the tax administration — C+ - P9-31 Public perception of integrity — C - P9-32 Publication of activities, results and plans — B ### Country economic context and fiscal pressures - Moldova profile highlights - Small lower-middle-income country with a high Human Development Index (0.767) and a gross national income per capita of USD 5,440. - Population of 2.6 million. - Remittances account for about a fifth of gross domestic product (GDP). - Over 60 percent of exports go to the EU; around 50 percent of imports come from the EU. - Moldova applied for EU membership in March 2022; the European Council granted candidate status on June 23, 2022, contingent on specific reforms. - Impact of the war in Ukraine and related sanctions continue to weigh heavily on Moldova, including risks from high energy and food prices and refugee accommodation costs. - Economic performance and outlook - The economy is projected to stagnate in 2022 as the impact of the war is likely to be prolonged. - GDP grew by 1.1 percent in the first quarter (year-to-year), a quarter-to-quarter contraction of 6.4 percent. - Unemployment rate increased to 3 percent in 2022 Q1 (from 2.6 percent in 2021 Q4). - Agricultural production expected to be muted in 2022 after an exceptionally good harvest in 2021. - Risks tilted to the downside, including potential disruptions in energy supply and escalation of the conflict with implications for refugee inflows and fiscal pressures. ### Main taxes and revenue composition (2021) - VAT: 36.1 percent of total tax revenues - Social and health fund contributions: 31.5 percent of total tax revenues - Excises: 10.8 percent of total tax revenues - CIT: 8.4 percent of total tax revenues - PIT: 7.4 percent of total tax revenues - Combined tax and social contribution revenues in 2021 amounted to (data tables in Attachment III provide numerical detail) *Source: 1mdaea2022008 - EXECUTIVE SUMMARY — https://www.imf.org/-/media/files/publications/cr/2022/english/1mdaea2022008.pdf* ### 29.2 percent of GDP. Further details on tax revenue and social contribution collections are provided in ### 1mdaea2022008 - 29.2 percent of GDP. Further details on tax revenue and social contribution collections are provided in ### Institutional Framework - The Moldovan tax administration was restructured from April 2017 to merge the main state tax inspectorate and 35 territorial inspectorates into a single legal entity – the State Tax Service (STS). - STS is a separate organizational structure within the administrative system of the Ministry of Finance (MoF). - MoF sets STS objectives and approves its structure and budget. - The Director of the STS approves scope and powers of sub-divisions and is assisted by four Deputy Directors. - Core functions are centralized in four territorial offices: Center, South, North, and Chisinau; local offices focus mainly on taxpayer services. - There is a Large Taxpayer Office (LTO) (formally the General Department for Administration of Large Taxpayers (GDALT)) and a centralized call center. - Headquarters (HQ) is reorganized broadly along functional lines. - Staffing complement is 1,931. - An organizational chart is provided in Attachment IV (as referenced in the source). ### Current Status of Tax Administration Reform - STS is working to improve operational capacity with a main focus on IT. - IT overhaul financed by the World Bank. - Other key international development partners active in STS: US Treasury Office of Technical Assistance, Swedish Tax Administration, and IMF. - The Government is preparing a wider tax policy reform which will have implications for tax administration development priorities. ### International Information Exchange - Republic of Moldova joined the Global Forum on Transparency and Exchange of Information for Tax Purposes on October 27, 2016, as the 136th member (out of current membership of 165). - The Second Round Phase 1 Peer Review Report was published by the Global Forum on November 25, 2021. - At the date of the peer review Moldova could exchange information with 148 partners through 47 double taxation conventions and the Multilateral Convention. ### POA 1 — Integrity of the Registered Taxpayer Base - Fundamental requirement: compile and maintain a complete database of businesses and individuals required by law to register. - Two performance indicators: P1-1 (Accurate and reliable taxpayer information) and P1-2 (Knowledge of the potential taxpayer base). P1-1: Accurate and reliable taxpayer information - Assessment (Table 2): - P1-1-1. The adequacy of information held … M1 D D - P1-1-2. The accuracy of information held … D - Key findings: - All filing and payment obligations with respect to core tax obligations are not specified in the State Tax Register (STR). - For PSA-assigned IDNOs, the STR does not indicate whether an annual CIT or PIT return is required. - Withholding Tax obligations are not recorded in the STR. - STR includes separate sub-registers for VAT and excise obligations (facilitating prompt STS follow-up of non-compliance). - No management, internal audit, or external audit reports were available to assure accuracy of the VAT sub-registry, though STS procedures include premises visits before VAT registration and use annex data to detect unregistered businesses. - PSA is the principal data source to initiate registrations; PSA issues an identification number (IDNO) and transmits data daily to STS for inclusion in STR. - STS cannot modify PSA-held registration data; requests to change PSA register data must be initiated by the registrant. - Certain professions and special regimes use birth identity numbers (IDNP) as taxpayer identifiers (legal profession including bailiffs, patent holders, peasant farmers); employees who file annual income tax returns also use IDNP. - STR does not record identities of related entities/parties, does not interface with STS filing and payment systems, and cannot archive deregistered taxpayers. - VAT and excise taxpayers may use more than one identification number; VAT/excise numbers are linked to IDNOs in STR. - STS has documented procedures to identify and remove inactive taxpayers; territorial offices prepare lists for HQ. - STS relies on PSA to complete de-registration; PSA can take months to complete processes. - STS preparing to de-register up to 95,000 peasant farmers under Law No. 51 of 10-03-2022 on measures to support the activities of peasant households (farmers); territorial offices will implement campaign in cooperation with local government administrations. - Identity verification gaps: STS does not verify identities of directors and shareholders (PSA responsible); multiple passports and identity theft pose risks. - STS does not use large-scale automated crosschecks with other government databases owing to outmoded IT systems and unreliable data in those agencies. - New tax register expected operational at the end of calendar year 2022: - Will identify all taxpayer liabilities and record dates liabilities arise. - Fiscal visits will be linked to the register. - Data from third parties can be integrated (including linkage to real property register and road tax obligations). - Will show clearer active/inactive status, allow merging of Multiple Taxpayer Identification Numbers (TINs), and archive deregistered taxpayer data. - STS will remain dependent on PSA for accurate registrations and will have limited powers to enforce registration of unregistered taxpayers. P1-2: Knowledge of the potential taxpayer base - Assessment (Table 3): M1 C - Key findings: - STS territorial offices undertake frequent inspections to identify unregistered businesses, but not based on systematic use of third-party data. - Territorial offices may access local government sources (e.g., trader and business registrations) but this is not systematic. - Territorial offices report regularly to STS HQ on actions to identify unregistered taxpayers; included in broader compliance reports. - Contacts with unregistered businesses are generally advisory visits explaining filing and payment obligations. - Tax code does not give STS power to enforce registration by unregistered businesses. - If businesses fail to register after advisory visits, territorial offices can refer them to the General Department for Compliance for audit follow-up. ### POA 2 — Effective Risk Management - Risk classifications: - Compliance risks: failure to meet four main taxpayer obligations (registration; filing; payment; accurate reporting). - Institutional risks: operational risk (systems and assets) and human capital risk (capability, capacity, compliance, cost, engagement). - Risk management is integral to multi-year strategic and annual operational planning. - Five performance indicators: P2-3, P2-4, P2-5, P2-6, P2-7. P2-3: Identification, assessment, ranking, and quantification of compliance risks - Assessment (Table 4): - P2-3-1. The extent of intelligence gathering … M1 C C - P2-3-2. The process used to assess, rank, and quantify taxpayer compliance risks. C - Key findings: - No evidence that data from a range of external sources was gathered and interpreted; access largely limited to internal sources. - Exceptions: certain non-entrepreneurial taxpayers require reporting of specific third-party data per Tax Code Chapter 11. - Some Customs data available; financial institutions notify STS when a bank account is opened, but limited wide-range data access. - Compatibility issues and absence of a data warehouse limit use of other public body data for risk assessment. - No environmental scans performed as part of multi-year strategic planning. - STS has an annual approach to assessing and quantifying compliance risks: identifies important sectors and applies pre-defined risk rules to estimate tax gaps; detailed sector analyses performed ad hoc. - General Department for Compliance prepares annual compliance improvement plan; risks codified in a risk register with categories: - General risks (14), specific risks (27), VAT risks (21), large taxpayer risks (27). - Annual methodology prescribed by STS Order number 107 of 2015 (updated annually). - Annual plans accumulate too many priorities and do not rank/prioritize risks or set medium-term mitigation strategy. P2-4: Mitigation of risks through a compliance improvement plan - Assessment (Table 5): M1 C - Key findings: - Compliance Program has broad mitigation strategies for all identified risks and core tax obligations but is not fully resourced. - 2022 Compliance Program proposes graduated responses from advisory letters/visits to audits and enforcement but lacks details on number/mix of treatments and required resources. - Program used as a case selection tool for audit/compliance interventions; lists of high-risk taxpayers are issued to territorial offices and tax audit department. - Lists are kept small due to staff constraints and local discretionary work. - No optimization of resource use to fully address priority risks or resourced project teams to mitigate them. - No specific strategy for key segments like large taxpayers, despite this segment contributing up to 36 percent of total tax revenue (STS Taxpayer Compliance Program 2022). - Treatments applied to large taxpayers are the same as those for all taxpayers. P2-5: Monitoring and evaluation of compliance risk mitigation activities - Assessment (Table 6): M1 C - Key findings: - Compliance Risk Committee established in November 2017 but not very active. - Committee brief: examine/approve risks and sectors, approve treatment strategies, monitor implementation and effectiveness. - Met twice in recent years: July 2020 (approve 2020 plan) and October 2021 (approve 2022 strategy); had not met in 2022 at time of assessment. - Effectiveness of some but not all mitigation strategies is evaluated. - Quarterly and annual reports prepared showing variations in tax payments and arrears after voluntary compliance treatments. - Reports cite numbers of compliance letters, meetings, and visits (not audits); compare indices of taxes paid and arrears to prior-year periods. - More detailed annual reports examine indices (including level of wages paid) for monitored taxpayers per territorial office. - Increased payments are assumed to result from voluntary compliance work without direct causal linkage. - Cost benefit analysis of voluntary compliance interventions conducted in 2020 measured increases in taxes paid against staff resources used. - A January 18, 2022 report considered taxpayer compliance impact following 2021 interventions using on-the-spot checks. - In absence of an active Compliance Risk Management Committee, no evidence that senior management reviews the impact of all compliance activities. P2-6: Management of operational risks - Assessment (Table 7): - P2-6-1. The process used to identify, assess and mitigate operational risks. M1 C C - P2-6-2. The extent to which the effectiveness of the business continuity program is tested, monitored and evaluated. C - Key findings: - STS has a process to manage operational risks but regular staff training in operational risks is not fully implemented. - A Risk Register includes 45 up-to-date operational risks across five categories: institutional, financial, operational, IT, and support risk. - "Risk passports" developed for each risk including business impact analyses. - All STS staff virtually trained in occupational safety; regular operational risk-role training still early stage. - Institutional Risk Committee in place to identify new risks and follow-up mitigation. - Business Continuity Plans (BCP) developed and implemented for fire, IT, and gas supply. - Fire drills and ICT continuity exercises conducted in December 2021 with documented results. - Guidelines and IT tools developed to allow staff to work from home (notebooks, STS database access, e-signature). - Institutional Risk Committee monitors BCP implementation quarterly and reviews test results to update BCPs. - BCPs' effectiveness tested and audited on an ad hoc basis by internal audit; no external audit of BCP effectiveness documented. P2-7: Management of human capital risks - Assessment (Table 8): - P2-7-1. Capacity and structures to manage human capital risks. M1 D D - P2-7-2. Degree to which status of human capital risks and related mitigation interventions are evaluated. B - Key findings: - STS has capacity and structures to manage Human Capital Risks (HCR) but no independent third-party review of HR operations and systems in the last seven years. - Formal processes exist to identify, assess, prioritize, and mitigate HCR within the institutional risk management framework. - Ten HR-related risks included in the risk register with risk passports developed. - HR Management Department staff understand HR risks; HCR awareness included in leadership training. - Performance evaluation framework requires staff to agree performance expectations with line managers at least twice a year. - Institutional Risk Committee (with competent persons independent of HR) conducts a formal evaluation of HCR status every six months, covering at least one risk in each required category and additional four risks across categories. - 2021 annual report contains Chapter 9 dealing with human capital risks. ### POA 3 — Supporting Voluntary Compliance - Purpose: adopt service-oriented attitude; provide summarized, understandable information and reduce taxpayer costs of compliance. - Four performance indicators: P3-8 (Scope, currency, accessibility of information), P3-9 (Time to respond to information requests), P3-10 (Initiatives to reduce compliance costs), P3-11 (Obtaining taxpayer feedback). P3-8: Scope, currency, and accessibility of information - Assessment (Table 9): - P3-8-1. Range of information available … M1 B B - P3-8-2. Degree to which information is current … A - P3-8-3. Ease by which taxpayers obtain information … A - Key findings: - STS website is main information source and provides a wide range of data on all tax obligations and entitlements for core taxes, including a calendar for deadlines. - Information is categorized by taxpayer type (legal entity, physical person, non-resident, etc.). - Key industry groups and segments (e.g., large taxpayers) are not specifically addressed on the website. - A large searchable database of tax precedents (Generalized Basis of Tax Practice) explains tax law and practice. - Information is tailored for tax intermediaries and new taxpayers to achieve a B score: - Website not specifically tailored to tax intermediaries, but there is an active Facebook page Contabil News aimed at tax intermediaries. - A section on the website for new taxpayers includes a booklet ‘The Beginner Taxpayer’s Guide – Tax Issues’. - Disadvantaged groups not yet fully catered for; meetings held with groups representing people with disabilities. - New-look website launched in 2021 has a setting for sight impairment accessibility. - A small unit in the Cooperation and Exchange of Information Department (two dedicated technical staff) is tasked with keeping website information current per SFS order no. 285 of 2021. - Taxpayers are made aware of legislative changes in advance where possible (example reference to deregistration of peasant farmers coming into force on May 1, as noted in the source). *Source: Extracted text from the IMF content unit 1mdaea2022008 (as provided).* ### 2022. That law change was flagged to the affected taxpayers in an issue of the STS publication, the ### 1mdaea2022008 - 2022. That law change was flagged to the affected taxpayers in an issue of the STS publication, the ### P3-9: The time taken to respond to taxpayers and tax intermediaries’ requests for information - Measurement: M1 A - Key findings: - A call center is available to provide technical support to taxpayers and information about tax law; the service is run by the Center of IT in Finance (CITF), which is not within the STS, but its staff are trained to answer general queries about tax law. - About one-quarter of the queries relate to tax law, with three-quarters seeking IT technical support. - Almost 98 percent of calls are answered within 6 minutes, as per the numerical data provided in Table 3 in Attachment III. - There is no STS commitment to timely responses to taxpayers, but the law requires all government agencies to respond to citizens within 30 days. - The taxpayers’ charter on the STS website sets out rights and obligations, but it makes no mention of a timeliness standard. - A document management system, Synapsis, records all correspondence received, to whom it is assigned, and the timeliness of the response. ### P3-10: Scope of initiatives to reduce taxpayer compliance costs - Measurement: M1 D - Key findings: - STS does not routinely review common mistakes and misinterpretations of the law encountered by administration and control staff. - Frequently asked questions are analyzed and the Generalized Basis of Tax Practice updated accordingly, but procedures have not been put in place to obtain feedback from front-line staff involved in service or verification activities. - Reducing taxpayer compliance costs and the administrative burden on taxpayers are the first two priorities of the STS Action Plan for 2022. - Planned measures include increased digitization of forms and processes and development of proposals to reduce the administrative burden on taxpayers. - Simplification and digitization already in place: - VEN12 standard tax declaration runs to 10 pages. - SIMM20: a shorter, one-page form developed for small and medium enterprises. - AI17: an even simpler form used by small taxpayers who have simplified record keeping requirements and pay income tax on a percentage of turnover. - Prefilled annual PIT returns for taxpayers with employers. - All tax forms are regularly reviewed and updated. - All taxpayers have secure 24-hour access to their tax accounts. - Electronic services usage and satisfaction: - Taxpayers increasingly use electronic services (as shown in Table 11 at Attachment III) which provide 24-hour access to their tax accounts. - A small survey conducted by STS in 2021 indicated a high degree of satisfaction with the electronic services provided. ### P3-11: Obtaining taxpayer feedback on products and services - Measurement dimensions and scores: - P3-11-1 (use and frequency of methods to obtain performance feedback): M1 B C - P3-11-2 (extent taxpayer input is taken into account in design): C - Key findings: - STS increasingly uses its website to get feedback from taxpayers. - In the past twelve months, six taxpayer perception surveys were conducted on topics ranging from integrity of STS staff to the quality of responses to taxpayer requests. - Survey sample sizes tend to be small, ranging from 132 to 2,313. - Results of the surveys are published on the STS website. - A third-party survey into taxpayers’ perception of STS services was conducted in late 2018 by Magenta Consulting; another will not be completed within three years. - The Magenta survey, published in January 2019, interviewed a representative sample of 464 enterprises and 85 large taxpayers. - A repeat survey is due to be undertaken under the TAMP program during 2022, four years after the previous survey. - Taxpayer and tax intermediary input is increasingly taken into account: - Frequent and robust exchanges with some 12,000 tax intermediaries on the Facebook page Contabili News (Accountants News). - Bi-monthly meetings are held with representatives of this group; feedback from these meetings is analyzed and changes made to administrative processes and products as a result. - Taxpayer surveys are analyzed, and action taken to improve services, at least on an ad hoc basis. - Taxpayer input was invited at ‘taxpayer days’ at town halls in August 2022, but this initiative is too recent to be regarded as regular. ### POA 4: Timely Filing of Tax Declarations — overview and P4-12 on-time filing rates - Context: - Filing of tax declarations remains a principal means by which a taxpayer’s tax liability is established and becomes due and payable. - Trends noted include streamlining preparation and filing (e.g., through pre-filling tax declarations), treating income tax withheld at source as a final tax in some countries, and increased electronic filing for all core taxes. - It is important to obtain declarations even from taxpayers unable to pay at the filing due date; priority is to obtain the declaration and then secure payment through enforcement and other measures in POA 5. - Three performance indicators used to assess POA 4: - P4-12—On-time filing rate. - P4-13—Management of non-filers. - P4-14—Use of electronic filing facilities. - P4-12 assessment (Table 13) — measurement dimensions and scores: - P4-12-1 (CIT declarations on-time): M2 B B - P4-12-2 (PIT declarations on-time): B - P4-12-3 (VAT declarations on-time): B - P4-12-4 (Domestic excise declarations on-time): C - P4-12-5 (PAYE withholding declarations on-time): B - Key statistics and findings on filing: - On-time CIT filing rates have improved with filing rates of 81.1 percent for all CIT taxpayers and 96.7 percent for CIT large taxpayers. - STR does not provide separate sub-registers to identify legal entities and individual entrepreneurs liable to file CIT and PIT returns, but STS can now separate these two categories based upon the types of returns required, facilitating tracking of filing compliance. - Mandatory rules for electronic filing of returns by most legal entities and improvements to STS’s electronic services and taxpayers’ ready access to their personal cabinets may have contributed to improvements in on-time CIT filing rates. - Improvements in on-time PIT filing compliance have also been achieved. *Source: https://www.imf.org/-/media/files/publications/cr/2022/english/1mdaea2022008.pdf* ### 84.3 percent for all PIT taxpayers. STS has made significant efforts to identify inactive individual ### 1mdaea2022008 - 84.3 percent for all PIT taxpayers. STS has made significant efforts to identify inactive individual ### Filing compliance and taxpayer register cleanup - PIT on-time filing rate cited as 84.3 percent for all PIT taxpayers. - More than 60,000 individual taxpayers were removed from the register in the period 2019-2021 (Table 2, Attachment III). - STS removed more than 35,000 taxpayers from the obligation to file PAYE withholding declarations during 2019-2022. - Improvements in territorial offices’ tracking of PIT filing compliance have impacted on-time PIT return filing rates. ### VAT and excise compliance - VAT on-time filing rates: 93.7 percent for all VAT taxpayers and 98.6 percent for VAT large taxpayers. - VAT separate sub-register enables close monthly monitoring and facilitates prompt follow-up and VAT de-registration for persistent non-compliance. - On-time excise return filing rates: 84 percent for all excise taxpayers and 91.4 percent for large excise taxpayers. - Small population effect: only 27 identified large excise taxpayers; five failing to file on-time in July–December 2021 significantly affected large-taxpayer excise filing statistics (Table 9, Attachment III). After clarification, on-time excise filing for large taxpayers rose to 100 percent in January–June 2022. ### Management of non-filers (P4-13) - Automated systems to identify late filers or non-filers are not used and penalties are not automatically generated for non-filers. - STS Taxpayer Services Manual provides extensive guidance for territorial officers on follow-up steps. - Quarterly reports on filing compliance and non-filer numbers are submitted by territorial offices to the General Department for Compliance in HQ. ### Electronic filing (P4-14) - Score: More than 50 percent of declarations are filed electronically for at least two core taxes (M1 C). - 2021 electronic filing rates: VAT, PAYE withholding, and CIT returns all exceeded 70 percent; PIT electronic filing was 21.2 percent (Table 11, Attachment III). - Electronic filing mandatory for VAT and for most CIT and PAYE withholding filers; PIT taxpayers generally not required to file electronically unless registered for VAT or as entrepreneurs employing more than five persons. ### Timely payment of taxes (POA 5) - All core taxes administered by STS must be and are paid electronically (P5-15 Score M1 A). - Withholding at source and advance payment systems are used; law requires: withholding on all employment income; advance payments on account of CIT and PIT; withholding on dividends and interest (P5-16 Score M1 A). - VAT payments on-time by number: 97.6 percent for all VAT taxpayers and 98.8 percent for VAT large taxpayers (P5-17-1 Score M1 B). - VAT payments on-time by value: 98.1 percent for all VAT taxpayers and 98.8 percent for VAT large taxpayers (P5-17-2 Score B). ### Tax arrears (P5-18) - Three-year average of total core tax arrears = 20.6 percent of total core tax collections over that period. - Three-year average of collectible core tax arrears = 2.8 percent of total core tax collections (rising from 2.2 percent in 2019 to 3.2 percent in 2021). - Three-year average of core tax arrears more than 12 months old = 78.6 percent of all core tax arrears. - Key drivers of aged arrears: backlog of insolvency cases requiring civil courts and cases under criminal proceedings preventing liquidation of entities. ### Verification, audits, and compliance risk (POA 6) - Audit program covers planned and unplanned, operative and post-operational, total, partial, thematic, and factual verifications; includes fiscal posts and tax crime investigations. - Annual planned audits ~1,150 (95 for GDALT) with a reserve of ~6,000 mandatory audits (including 442 for GDALT). - Central selection of audits (except operative controls) ordered as of January 2022 (Order no. 141 of November 30, 2021) but not yet observed in effect. - Audit impact on taxpayer compliance not routinely measured; reports focus on time use and outputs rather than compliance impact. - Audit manual comprehensive and frequently updated; Chapter 11 of the Tax Code prescribes audit procedures and time limits. - Audit quality review system introduced in 2020 with three-level review and an 11-criteria checklist; findings presented quarterly to senior management. - Tax Control Plan 2022 lacks KPIs; audit plan does not set expectations for audit yield, strike rate, or timeliness. ### Large-scale data-matching and analytics (P6-20, P6-22) - No evidence of large-scale automated crosschecking of bulk data against tax declarations; STS IT weaknesses and lack of interoperability impede automation (P6-20 Score M1 D). - Example: POLMED17 form matched to customs data via Business Intelligence query but not automated or large-scale. - STS developing skills in tax gap estimation (RA-GAP). FAD RA-GAP 2021 indicates trade, transport, construction, and manufacturing contribute most to potential VAT gap; results not yet incorporated into compliance planning (P6-22 Score M1 C). ### Proactive initiatives and rulings (P6-21) - STS website hosts a robust database of binding public rulings (Generalized Basis of Tax Practice) structured by the Tax Code in Q&A format and updated frequently. - Binding private (advance) rulings exist under Article 1361 for a fee (60,000 MDL for a large taxpayer; 30,000 MDL for others) but rarely requested—only one private ruling ever issued. - No cooperative compliance arrangements and low demand for advance rulings (P6-21 Score M1 B). ### Dispute resolution (POA 7) - Three-stage review and appeal process exists: STS Appeals Department or Disputes Resolution Council; court; Court of Appeal (P7-23-1 Score M2 A). - Appeals Department organizationally and physically independent of audit divisions; taxpayers informed of dispute rights via multiple channels (P7-23 Scores A across dimensions). - Administrative reviews: more than 90 percent completed within 60 days; 80.8 percent finalized within 30 days (P7-24 Score M1 B). - STS monitors and analyzes dispute outcomes; Appeals Department prepares monthly reports with proposals for procedural and legislative changes and submits legislative proposals to the Ministry of Finance (P7-25 Score M1 A). ### Revenue accounting and VAT refunds (POA 8) - STS provides regular input to MoF on tax revenue collections and monitors collections against budgeted forecasts monthly; annually forecasts VAT refund levels monthly and reports on tax expenditures via the register of tax incentives (P8-26 Score M1 B). - Revenue accounting IT system not adequate (P8-27 Score M1 D). Improvements: Taxpayer Current Account (2014) and Treasury Information Management System (2020) interconnected with MoF Treasury, but manual posting persists and can exceed the TADAT maximum of three business days. - VAT refund system: no risk-based automated verification; refund selection manual; refund decision within three days on whether to perform pre-refund or post-refund verification; all claimants audited at least once a year (P8-28 Scores M2 D / D). - Over 70 percent of VAT refund claims by number and 62.3 percent by value are processed within 30 calendar days. Legal deadline for VAT refund claims processing = 45 days. Taxpayers entitled to interest on delayed refunds but must claim interest; no evidence of any such claim made. ### Accountability, oversight, and integrity (POA 9) - Internal Audit: organizationally independent IA unit reporting to STS head; strategic IA plans (2022–2024); at least one IT operations audit annually; 3 of 5 IA staff included in Register of Certified Public Sector Internal Auditors (P9-29-1 Score M2 C / B). - Staff integrity: Code of Conduct read and signed by all staff; Internal Security and Anticorruption Unit (ISAU) with four staff reporting to STS head; ISAU publishes quarterly statistics on complaints and outcomes (P9-29-2 Score A). - External oversight: Court of Accounts audits STS annually; reports and responses published on STS website (P9-30-1 Score M2 A / C+). No external authority dedicated to investigate taxpayer complaints about STS; Ombudsman focuses on human rights; anticorruption prosecutor investigates serious tax official corruption (P9-30-2 Score D). - Public perception monitoring: independent survey conducted in 2018 of 1,026 individuals and 549 legal entities; results published May 2019; survey planned to be repeated in 2022. An online survey in September–October 2021 had only 132 responders and does not qualify for TADAT scoring (P9-31 Score M1 C). - Publication of activities and plans: annual reports published within six months of fiscal year-end; budget execution details published three months after reporting period. STS Strategic Plan 2021–2023 published in July 2021. Some annual plans published within two months; 2022 annual plan published in May 2022 (P9-32 Scores M2 A / B and C). *Source: 1mdaea2022008 - 84.3 percent for all PIT taxpayers. STS has made significant efforts to identify inactive individual* ### 1. Integrity of the registered taxpayer base: Registration of taxpayers and maintenance of a ### 1. Integrity of the registered taxpayer base: Registration of taxpayers and maintenance of a complete and accurate taxpayer database is fundamental to effective tax administration. ### Core tax administration outcome areas (numbered findings from source) - 1. Integrity of the registered taxpayer base: Registration of taxpayers and maintenance of a complete and accurate taxpayer database is fundamental to effective tax administration. - 2. Effective risk management: Performance improves when risks to revenue and tax administration operations are identified and systematically managed. - 3. Supporting voluntary compliance: Usually, most taxpayers will meet their tax obligations if they are given the necessary information and support to enable them to comply voluntarily. - 4. On-time filing of declarations: Timely filing is essential because the filing of a tax declaration is a principal means by which a taxpayer’s tax liability is established and becomes due and payable. - 5. On-time payment of taxes: Non-payment and late payment of taxes can have a detrimental effect on government budgets and cash management. Collection of tax arrears is costly and time consuming. - 6. Accurate reporting in declarations: Tax systems rely heavily on complete and accurate reporting of information in tax declarations. Audit and other verification activities, and proactive initiatives of taxpayer assistance, promote accurate reporting and mitigate tax fraud. - 7. Effective Tax Dispute Resolution: Independent, accessible, and efficient review mechanisms safeguard a taxpayer’s right to challenge a tax assessment and get a fair hearing in a timely manner. - 8. Efficient revenue management: Tax revenue collections must be fully accounted for, monitored against budget expectations, and analyzed to inform government revenue forecasting. Legitimate tax refunds to individuals and businesses must be paid promptly. - 9. Accountability and transparency: As public institutions, tax administrations are answerable for the way they use public resources and exercise authority. Community confidence and trust are enhanced when there is open accountability for administrative actions within a framework of responsibility to the minister, legislature, and general community. ### TADAT indicators and scoring methodology - A set of 32 high-level indicators linked to the performance outcome areas are scored and reported. - A total of 55 measurement dimensions are taken into account in arriving at the indicator scores. Each indicator has between one and five measurement dimensions. - Repeated assessments provide information on improvement over time. - Scoring follows the PEFA diagnostic tool approach to aid comparability. - Each of TADAT’s 55 measurement dimensions is assessed separately; the overall indicator score is based on these dimensions. - Two combination methods are used to derive indicator scores from dimensions: - Method M1: used for single-dimensional indicators and multi-dimensional indicators where poor performance on one dimension likely undermines the impact of good performance on other dimensions (weakest link). - Method M2: averaging the scores for individual dimensions; used where a low score on one dimension does not necessarily undermine higher scores on other dimensions. - The four-point ‘ABCD’ scale is used to score each dimension and indicator for both M1 and M2. ### Republic of Moldova: Country snapshot — key statistics - Geography: territory of 33,851 sq. km. - Usual resident population, as of January 1, 2022 - 2,603,813 (http://www.statistica.md) - Adult literacy rate: 99.4 percent of persons aged 15 and over can read and write. - GDP, April 2022, current prices: USD 13.81 billion USD. - Per capita GDP, April 2022 current prices: USD 5.44 thousand. - Internet users per 100 people (2017): 76. - Main taxes: VAT, Social Contributions and Health Contributions together accounted for 63 percent of all central government revenues in 2020. - Tax-to-GDP for 2021: 29.2 percent, of which VAT is 10.5 percent of GDP and Social & Health Contributions are 9.2 percent of GDP. - Number of taxpayers as at end-2021: - CIT: 135,073 - PIT: 150,610 - PAYE: 96,130 - VAT: 30,775 - Domestic excise tax: 150 - Main collection agency: State Tax Service - Number of staff in the main collection agency: 1,931 - Financial Year: Calendar year ### Tax revenue collections (selected exact figures from Table 1, 2019-2021, Million MDL) - National budgeted tax revenue forecast (administered by STS): 2019: 39 063.2; 2020: 39 267.9; 2021: 45 800.0 - Total tax revenue collections, including: 2019: 57 812.4; 2020: 58 510.4; 2021: 70 702.1 - Tax revenue collections — administered by STS: 2019: 39 135.1; 2020: 40 517.5; 2021: 47 285.4 - Tax revenue collections — administered by CS (VAT + Excises): 2019: 21 147.5; 2020: 20 824.0; 2021: 26 346.0 - Corporate income tax (CIT): 2019: 5 266.0; 2020: 5 030.4; 2021: 5 905.4 - Personal income tax (PIT): 2019: 4 132.0; 2020: 4 323.5; 2021: 5 307.7 - Value Added Tax (VAT) — gross domestic collections: 2019: 7 633.5; 2020: 7 813.3; 2021: 8 918.3 - Value Added Tax (VAT) — collected on imports: 2019: 15 454.4; 2020: 14 914.2; 2021: 19 614.6 - VAT and Excises refunds — administered by MF: 2019: -2 930.8; 2020: -2 968.7; 2021: -3 051.2 - Excises on domestic transactions: 2019: 555.0; 2020: 570.9; 2021: 903.8 - Excises — collected on imports: 2019: 5 693.1; 2020: 5 909.8; 2021: 6 731.5 - Social insurance contributions (administered by STS and NSIH): 2019: 13 791.3; 2020: 14 516.2; 2021: 16 522.2 - Health insurance contributions (administered by STS and NHIC): 2019: 4 822.7; 2020: 5 008.8; 2021: 5 705.0 - Other domestic taxes (selected): property taxes 2019: 579.9; 2020: 582.3; 2021: 750.2 ### Shares of tax components (percent of total tax revenue collections) - Total tax revenue collections: 100.0 (2019), 100.0 (2020), 100.0 (2021) - CIT: 9.1 (2019), 8.6 (2020), 8.4 (2021) - PIT: 7.0 (2019), 7.3 (2020), 7.4 (2021) - VAT: 34.9 (2019), 33.8 (2020), 36.1 (2021) - Excises: 10.8 (2019), 11.1 (2020), 10.8 (2021) - Social insurance contributions: 23.9 (2019), 24.8 (2020), 23.4 (2021) - Health insurance contributions: 8.3 (2019), 8.6 (2020), 8.1 (2021) ### Tax revenue intensity (percent of GDP) - Total tax revenue collections: 27.5 (2019), 29.3 (2020), 29.2 (2021) - VAT: 9.6 (2019), 9.9 (2020), 10.5 (2021) - Social insurance contributions: 6.6 (2019), 7.3 (2020), 6.8 (2021) - Health insurance contributions: 2.3 (2019), 2.5 (2020), 2.4 (2021) ### Movements in the taxpayer register (Table 2, selected exact figures) - Total registered taxpayers: - 2019: 314 162 registered; Taxpayers otherwise not required to file: 182 037; Taxpayers expected to file: 132 125; New registrations [D1]: 8 121; Taxpayers deregistered during year [D2]: 39 981 - 2020: 297 853 registered; Taxpayers otherwise not required to file: 163 552; Taxpayers expected to file: 134 301; New registrations [D1]: 8 031; Taxpayers deregistered during year [D2]: 24 341 - 2021: 289 082 registered; Taxpayers otherwise not required to file: 171 435; Taxpayers expected to file: 117 647; New registrations [D1]: 8 870; Taxpayers deregistered during year [D2]: 17 637 - Selected by tax type (2021): - Corporate income tax: Registered 135 073; Taxpayers otherwise not required to file 48 152; Taxpayers expected to file 86 921; New registrations 6 878; Deregistered 5 604 - Personal income tax: Registered 150 610; Taxpayers otherwise not required to file 119 884; Taxpayers expected to file 30 726; New registrations 1 945; Deregistered 11 985 - PAYE withholding (# of employers): Registered 96 130; otherwise not required to file 31 395; expected to file 64 735; New registrations 7 744; Deregistered 12 141 - Value Added Tax: Registered 30 775; otherwise not required to file 0; expected to file 30 775; New registrations 2 313; Deregistered 1 113 - Domestic excise tax: Registered 150; otherwise not required to file 0; expected to file 150; New registrations 11; Deregistered 5 ### Telephone enquiries (Table 3: July 2021 - June 2022) - Monthly totals and performance (selected months with exact figures) - July 2021: Total calls 9 139; Calls answered within 6 minutes 9 067; In percent of total calls 99.2 - August 2021: Total calls 7 493; Calls answered within 6 minutes 7 437; In percent 99.3 - November 2021: Total calls 12 196; Calls answered within 6 minutes 11 967; In percent 98.1 - December 2021: Total calls 15 812; Calls answered within 6 minutes 15 509; In percent 98.1 - June 2022: Total calls 13 926; Calls answered within 6 minutes 12 923; In percent 98.8 - 12-month total: Total number of telephone enquiry calls received 137 297; Telephone enquiry calls answered within 6 minutes’ waiting time 134 286; In percent of total calls 97.8 ### Filing of tax declarations (selected exact figures) - Table 4. On-time Filing of CIT Declarations for 2021: - Number of declarations filed on-time: 70 474 - Number of declarations expected to be filed: 86 921 - On-time filing rate (In percent): 81.1 - Large taxpayers only: Number filed on-time 534; Number expected to be filed 547; On-time filing rate 97.6 - Table 5. On-time Filing of PIT Declarations for 2021: - Number of declarations filed on-time: 25 902 - Number of declarations expected to be filed: 30 726 - On-time filing rate (In percent): 84.3 *Attachment II–III (Republic of Moldova country snapshot, data tables, and TADAT assessment methodology as provided in the source PDF.*) ### 2. but. following discussions with TADAT experts. excludes GT taxpayers who did not file a declaration for 2021 in ### 1mdaea2022008 - 2. but. following discussions with TADAT experts. excludes GT taxpayers who did not file a declaration for 2021 in ### On-time Filing of VAT Returns — All VAT taxpayers (July 2021 - June 2022) - July 2021: Number of declarations filed on-time 28 197; Number of declarations expected to be filed 30 153; On-time filing rate 93.5 (In percent) - August 2021: Number of declarations filed on-time 28 489; Number of declarations expected to be filed 30 258; On-time filing rate 94.2 (In percent) - September 2021: Number of declarations filed on-time 28 492; Number of declarations expected to be filed 30 376; On-time filing rate 93.8 (In percent) - October 2021: Number of declarations filed on-time 28 719; Number of declarations expected to be filed 30 518; On-time filing rate 94.1 (In percent) - November 2021: Number of declarations filed on-time 28 866; Number of declarations expected to be filed 30 650; On-time filing rate 94.2 (In percent) - December 2021: Number of declarations filed on-time 29 040; Number of declarations expected to be filed 30 767; On-time filing rate 94.4 (In percent) - January 2022: Number of declarations filed on-time 28 983; Number of declarations expected to be filed 31 158; On-time filing rate 93.0 (In percent) - February 2022: Number of declarations filed on-time 29 230; Number of declarations expected to be filed 31 317; On-time filing rate 93.3 (In percent) - March 2022: Number of declarations filed on-time 29 446; Number of declarations expected to be filed 31 478; On-time filing rate 93.5 (In percent) - April 2022: Number of declarations filed on-time 29 649; Number of declarations expected to be filed 31 613; On-time filing rate 93.8 (In percent) - May 2022: Number of declarations filed on-time 29 960; Number of declarations expected to be filed 31 708; On-time filing rate 94.5 (In percent) - June 2022: Number of declarations filed on-time 29 947; Number of declarations expected to be filed 31 794; On-time filing rate 94.2 (In percent) - 12-month total: Number of declarations filed on-time 177 215; Number of declarations expected to be filed 189 068; On-time filing rate 93.7 (In percent) Explanatory notes: - ‘On-time’ filing definition preserved from source. - Note: Column Number of declarations filed on time excludes 2 821 VAT declarations filed by non-VAT taxpayers (selected by PI CITF). - Column Number of declarations expected to be filed reflects total number of VAT taxpayers at the beginning of each month (selected by PI CITF). ### On-time Filing of VAT Declarations — Large taxpayers only (July 2021 - June 2022) - July 2021: Number of declarations filed on-time 535; Number expected 546; On-time filing rate 98.0 (In percent) - August 2021: 532; 545; 97.6 - September 2021: 538; 545; 98.7 - October 2021: 531; 545; 97.4 - November 2021: 534; 544; 98.2 - December 2021: 533; 543; 98.2 - January 2022: 533; 543; 98.2 - February 2022: 535; 541; 98.9 - March 2022: 536; 541; 99.1 - April 2022: 529; 541; 97.8 - May 2022: 536; 541; 99.1 - June 2022: 533; 541; 98.5 - 12-month total: 3202; 3248; 98.6 (In percent) Note: Column Number of declarations filed on time excludes 55 VAT declarations filed by large taxpayers - non-VAT payers. ### On-time Filing of Domestic Excise Tax Declarations (categories contributing 70 percent of total domestic excise tax by value) (July 2021 - June 2022) - July 2021: Number filed on-time 124; Expected 146; Rate 84.9 (In percent) - August 2021: 126; 146; 86.3 - September 2021: 127; 146; 87.0 - October 2021: 123; 147; 83.7 - November 2021: 131; 148; 88.5 - December 2021: 122; 148; 82.4 - January 2022: 125; 151; 82.8 - February 2022: 120; 150; 80.0 - March 2022: 123; 151; 81.5 - April 2022: 129; 153; 84.3 - May 2022: 127; 153; 83.0 - June 2022: 129; 153; 84.3 - 12-month total: 1506; 1792; 84.0 (In percent) Note: Expected declarations reflect total number of taxpayers – authorized warehouse keepers at the beginning of each month. ### On-time Filing of Domestic Excise Tax Declarations — Large taxpayers only (July 2021 - June 2022) - July 2021: 22; 27; 81.5 - August 2021: 22; 27; 81.5 - September 2021: 22; 27; 81.5 - October 2021: 23; 27; 85.2 - November 2021: 22; 27; 81.5 - December 2021: 24; 27; 88.9 - January 2022: 27; 27; 100.0 - February 2022: 27; 27; 100.0 - March 2022: 27; 27; 100.0 - April 2022: 27; 27; 100.0 - May 2022: 27; 27; 100.0 - June 2022: 26; 27; 96.3 - 12-month total: 296; 324; 91.4 (In percent) ### On-time Filing of PAYE Withholding Declarations (filed by employers) (July 2021 - June 2022) - July 2021: Number filed on-time 51 813; Number expected 68 296; On-time filing rate 75.9 (In percent) - August 2021: 52 286; 68 285; 76.6 - September 2021: 52 434; 68 623; 76.4 - October 2021: 52 675; 64 565; 81.6 - November 2021: 52 950; 64 591; 82.0 - December 2021: 54 151; 64 610; 83.8 - January 2022: 52 355; 67 788; 77.2 - February 2022: 53 163; 68 355; 77.8 - March 2022: 53 114; 68 959; 77.0 - April 2022: 53 239; 69 196; 76.9 - May 2022: 53 704; 69 519; 77.3 - June 2022: 53 797; 69 629; 77.3 - 12-month total: 635 681; 812 416; 78.2 (In percent) Notes: - Column includes IPC21, TAXI18 and IU17 declarations filed by the statutory due date. - Expected declarations include number of active employers from Table 2 (plus registered taxpayers minus deregistered taxpayers in that month) at the end of each month. ### Electronic Services (Ref: POAs 4 and 5) — Use of Electronic Filing and Payments (2019-2021; 6 months 2022) Electronic filing (In percent of all declarations filed for each tax type): - CIT (VEN12. IVAO15. NER17. ONG17. SIMM20): 2019 63.3; 2020 65.9; 2021 70.4; 6 months 2022 75.7 - PIT (AI17. DAJ17. DASS19. UNIF18): 2019 14.1; 2020 17.3; 2021 21.2; 6 months 2022 26.4 - PAYE (Withholding) (IPC18 and IU17): 2019 80.0; 2020 87.7; 2021 89.0; 6 months 2022 88.6 - VAT: 2019 99.9; 2020 99.9; 2021 99.95; 6 months 2022 99.95 - Domestic excise tax (for all registered taxpayers): 2019 99.0; 2020 99.0; 2021 99.2; 6 months 2022 99.0 - Large taxpayers (all core taxes): 2019 100.0; 2020 100.0; 2021 100.0; 6 months 2022 100.0 Electronic payments (In percent of total number of payments received for each tax type): - CIT, PIT, PAYE, VAT, Domestic excise tax, Large taxpayers: 2019 100.0; 2020 100.0; 2021 100.0; 6 months 2022 100.0 Electronic payments (In percent of total value of payments received for each tax type): - CIT, PIT, PAYE, VAT, Domestic excise tax, Large taxpayers: 2019 100.0; 2020 100.0; 2021 100.0; 6 months 2022 100.0 Explanatory notes: - Definitions of electronic filing and electronic payment preserved from source. ### Payments — VAT Payments Made (2021 and 6 months 2022) During 2021: - Number of payments on-time: All VAT payers 18 006 506; Large VAT payers 18 626 512; On-time payment rate (by number) 96.7; (Large) 98.8 - Value of payments on-time (in local currency): All VAT payers 8 887 926.6; Large VAT payers 4 402 435.8; VAT payments due total value: All VAT payers 9 055 665.6; Large VAT payers 4 456 515.0; On-time payment rate (by value) All VAT payers 98.1; Large VAT payers 98.8 During 6 months 2022: - Number of payments on-time: All VAT payers 17 070 474; Large VAT payers 18 429 486; On-time payment rate (by number) 92.6; Large 97.5 - Value of payments on-time: All VAT payers 4 502 649.1; Large VAT payers 2 054 285.0; VAT payments due total value: All VAT payers 4 833 386.6; Large VAT payers 2 082 539.9; On-time payment rate (by value) All VAT payers 93.2; Large VAT payers 98.6 Notes: - ‘On-time’ payment definition preserved. - VAT payments made on time shows amount of VAT administered by STS collected in year 2021 / 6 months 2022 as well as number of one-time payers. ### Domestic Tax Arrears — Value of Tax Arrears 2019 - 2021 (In millions MDL) - Total core tax revenue collections (from Table 1) (A): 2019 48 132.5; 2020 48 583.8; 2021 58 879.1 - Total core tax arrears at end of fiscal year (B): 2019 1 060.5; 2020 1 394.2; 2021 1 858.5 - Of which: Collectible (C): 2019 1 060.5; 2020 1 394.2; 2021 1 858.5 - Of which: More than 12 months’ old (D): 2019 457.3; 2020 576.0; 2021 598.3 Ratios (In percent): - Ratio of (B) to (A): 2019 2.2; 2020 2.9; 2021 3.2 - Ratio of (C) to (A): 2019 2.2; 2020 2.9; 2021 3.2 - Ratio of (D) to (B): 2019 43.1; 2020 41.3; 2021 32.2 Notes: - ‘Total core tax arrears’ include tax, penalties, and accumulated interest. - Collectible definition and exclusions are preserved. - Following meetings with TADAT experts, only data related to income tax, value added tax, social insurance contributions and health insurance contributions from Table no.1 were included. ### Tax Dispute Resolution — Finalization of Administrative Reviews (July 2021 – June 2022) Monthly summary (selected months with key figures): - July 2021: Stock at beginning of month [A] 34; Received during the month [B] 27; Stock during the month [C] = [A + B] 61; Finalized during the month [D] 38; Stock at end of month [E] = [C - D] 23; Finalized within 30 days [F] 29; In percent of total [G] = [F / C] 47.5; Finalized within 60 days [H] 9; [I] 14.8; Finalized within 90 days [J] 0; [K] 0 - August 2021: A 23; B 28; C 51; D 25; E 26; F 21; G 41.2; H 4; I 7.8; J 0; K 0 - September 2021: A 26; B 28; C 54; D 39; E 15; F 30; G 55.6; H 9; I 16.7; J 0; K 0 - October 2021: A 15; B 35; C 50; D 23; E 27; F 19; G 38.0; H 4; I 8.0; J 0; K 0 - November 2021: A 27; B 40; C 67; D 38; E 29; F 33; G 49.3; H 5; I 7.5; J 0; K 0 - December 2021: A 29; B 30; C 59; D 37; E 22; F 33; G 55.9; H 4; I 6.8; J 0; K 0 - January 2022: A 22; B 22; C 44; D 24; E 20; F 20; G 45.5; H 4; I 9.1; J 0; K 0 - February 2022: A 20; B 24; C 44; D 15; E 29; F 11; G 25.0; H 4; I 9.1; J 0; K 0 - March 2022: A 29; B 17; C 46; D 23; E 23; F 19; G 41.0; H 3; I 6.5; J 1; K 2.1 - April 2022: A 23; B 18; C 41; D 14; E 27; F 11; G 26.0; H 3; I 7.3; J 0; K 0 - May 2022: A 27; B 20; C 47; D 15; E 32; F 12; G 25.0; H 3; I 6.4; J 0; K 0 - June 2022: A 32; B 13; C 45; D 23; E 22; F 16; G 35.0; H 7; I 8.8; J 0; K 0 - 12 months total: A 254; B 59; (other aggregated totals as presented in source) ### Payment of VAT Refunds (July 1, 2021 – June 30, 2022) - Total VAT refund claims received (A): Number of cases 3 039; Value in local currency, million MDL 4 564.31 - Total VAT refunds paid: Number of cases 2 714; Value 3 849.18 - Of which: paid within 30 days (B): Number 2 031; Value 2 388.64 - Of which: paid outside 30 days: Number 683; Value 1 460.54 - Total VAT refund claims declined: Number 125; Value 457.68 - Of which: declined within 30 days (C): Number 118; Value 454.73 - Of which: declined outside 30 days: Number 7; Value 2.95 - Total VAT refund claims not processed: Number 200; Value 257.46 - Of which: approved but not yet paid or offset: Number 200; Value 257.46 - Ratio of (B + C) to (A): 70.71 (Number) and 62.3 (Value) (In percent) Explanatory notes: - Include all refunds paid as well as refunds offset against other tax liabilities. - TADAT measures performance against a 30-day standard. - ‘Not processed’ includes cases where formal decision not yet taken or approved but not paid/offset. ### Organizational Chart and Key Departments - Director: Rozalina ALBU; Deputy Directors: Petru Griciuc, Iuri LICHII, Valeriu VLAS, Victoria Belous (Gh) - Departments listed include: Internal Audit Department; Human Resources Management Department; Economy and Finance Department; Informational Development Department; Document Management Department; Anti-fraud General Department; Cooperation and Exchange of Information Department; Organizational Management Department; Taxpayer Service General Department; Large Taxpayers Administration General Department; Internal Security and Anti-Corruption Department; Legal Expertize General Department; Public Procurement and Patrimony Management Department; Insolvency Procedures Department; Recovery of Arears General Department; Tax Records and Information Department; Taxes and Fees Methodology General Department; Appeals Department; Confiscated Goods Management Department; among others. ### Attachment V — Sources of Evidence (Selected indicators and evidence items) - P1-1 Accurate and reliable taxpayer information: P1-1 E1 Register report as at 31.1.2022; P1-1 E2 Register report as at 31.8.2022; P1-1 E3 Instructions for deregistering taxpayers; P1-1 E4 Tax Register Modernization Plan. - P2-3 Identification, assessment, ranking, and quantification of compliance risks: P2-3-1 E1 Audit Feedback for risk; P2-3-1 E2 Audit Feedback for risk 2; P2-3-1 E3 Risk Register published September 2022; P2-3-2 E1 Methodology classifying compliance risks 11.05.2021; P2-3-2 E5 Strategic Plan 2021 – 2023; P2-3-2 E6 Taxpayer Compliance Program 2022. - P2-6 Management of operational risks: P2-6-1 E1 Methodology for risk management in STS and 6 annexes; P2-6-1 E4 Business continuity plan for gas supply; P2-6-1 E6 Plan of continuity and restoration of the activity of the ICT of the STS; P2-6-2 E1 Internal Audit Report on Business Continuity September 2022. - P3-8 Scope, currency, and accessibility of information: P3-8-1 E1 Guide for new taxpayers; P3-8-2 E1 Business process updating website. - P4-12 On-time filing rate: Numerical data from Table in Attachment III. - P5-15 Use of electronic payment methods: Numerical data from Table in Attachment III. - P6-19 Scope of verification actions: P6-19-1 E1 Audit plan (published list) 2022; P6-19-2 E1 Audit guidelines construction sector; P6-19-2 E2 Audit Manual Agriculture and Food; P6-19-3 E1 Actions arising from AQR. - P6-20 Use of large-scale data-matching systems: P6-20 POLMED17 data matching. - P7-23 Existence of independent, workable, and graduated dispute resolution process: P7-23-2 Org structure Appeals division location; P7-24 Time taken to resolve disputes: Numerical data from Table in Attachment III. - P8-26 Contribution to government tax revenue forecasting process: P8-26 E1 Analysis monthly revenue collection –example January - June 2022; P8-26 E5 Methodology regarding the revenue forecasting Order No 135 in 2017. - P8-28 Adequacy of tax refund processing: P8-28 E1 Government Decision No. 93 for the approval of the regulation on the refund of value added tax; P8-28 E5 Numerical data from Table 15 in Attachment III. - P9-29 Internal assurance mechanisms: P9-29-1 E1 SFS Order No 0015 of 10 01 2022 Internal Audit Committee; P9-29-1 E4 Strategic Plan Internal Audit 2022-2024; P9-29-2 E1 Code of ethics and conduct of the tax officials in STS. - P9-30 External oversight: P9-30 E1 Link to reports by the Court of Auditors' audit and answers on the STS website; P9-30 E2 The State Tax Service's Sectoral Anti-Corruption and Integrity Action Plan for 2021 - 2022. - P9-31 Public perception of integrity: P9-31 E1 Report "Level of satisfaction of legal entities with FSS services and activities"; P9-31 E4 Report on the results of the opinion poll on the integrity of Service employees 2021 done by STS. *Fiscal Affairs Department, International Monetary Fund — content as presented in the source PDF.* --- _Source: https://www.imf.org/-/media/files/publications/cr/2022/english/1mdaea2022008.pdf_