Premier Maia Sandu has published declassified materials testifying to large-scale tax evasion through duty free shops and large-scale cigarette smuggling through duty free in Transnistria

Premier Maia Sandu has published declassified materials testifying to large-scale tax evasion through duty free shops and large-scale cigarette smuggling through duty free in Transnistria

According to the information note, in 2015-2019 the cost of goods imported for duty free shops amounted to 2.8 billion lei, while 85% of the goods were excisable: alcoholic beverages, cigarettes, coffee, perfumery, etc. As noted, up to 75% of goods declared as sold in duty free were illegally imported into Moldova. Moreover, some categories of goods did not even get to the warehouses of duty free shops - they were immediately imported into the country, and part of the goods were smuggled into neighboring countries - Romania (cigarettes) and Ukraine (alcoholic beverages) with preliminary storage in Moldova. The illegal schemes were organized with the help of the staff of the duty free shops (about 400). The spread of this phenomenon was also due to the fact that the wives / husbands of the Customs Service and the Border Police officers occupied posts in duty free shops. The information note indicates that duty free shops in land border crossing points, which, according to international practice, were banned in such places due to increased smuggling and corrupt functionaries, are of particular vulnerability. Duty free shops abroad are located only on the exit from the country at airports and seaports and ground points in order to serve the diplomatic corps. The materials noted that, at the same time, large budget losses (140 million lei per year) and disloyal competition in Moldova were due to the placement of duty free shops at the entrance to the country. Analysis of customs data for the last 5 years shows that from the imported duty free goods worth 2.8 billion lei, goods worth 450 million lei were purchased in duty free shops at the entrance to the country and imported into the Republic of Moldova without paying duties. It is noted that if companies in Moldova pay into the budget taxes amounting to 30-40% (excise taxes, VAT, income tax, etc.), then companies operating in duty free mode pay only 0.4% (3.2 million lei only income tax). In addition, duty free shops ignored the requirements for the sale of goods in small quantity and in small volume. The information note states that after the introduction of changes to the Customs Code in 2015, trade in duty free was legalized in the territory temporarily out of control of the Moldovan authorities. In particular, an analysis of the flow of goods for duty free shops located on the Transnistrian segment of the Moldovan-Ukrainian border shows smuggling activities, especially with cigarettes. Thus, from 2016, the Transnistrian Altai company has imported goods for duty free stores worth 1 billion lei from 2016, of which 970 million lei are tobacco products. “This quantity significantly exceeds the level of consumption of potential buyers at the exit from the country, on the Transnistrian segment of the border. Operational data suggests that most cigarettes are distributed to groups specializing in cigarette smuggling to EU countries,” the document says. It states that consignments of smuggled cigarette brands imported for sale in duty free shops in the territory uncontrolled by the official authorities are being arrested in the EU countries. The note proposes an amendment to the Customs Code to repeal provisions on trade in duty free mode in the territory temporarily uncontrolled by the Moldovan authorities. The information note also states that although there were cases of illegal importation into the country of goods purchased in large quantities in duty free shops, not a single duty free shop was fined, according to the provisions of the Customs Code (a fine from 10% to 100% of the cost of goods with possible license revocation). As noted, as a rule, punishment is applied only to individuals engaged in illegal traffic of these goods; the administrative fine they are charged entail confiscation of goods, but the penalty does not apply to duty free suppliers. // 11.07.2019 - InfoMarket.

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