How does corruption ruin us

Cetăţenii bulgari votează duminică în cadrul primului tur al alegerilor prezidenţiale considerate drept un test de popularitate pentru premierul conservator Boiko Borisov şi pentru viitorul relaţiilor dintre Sofia şi Moscova, potrivit AFP.

The head of one of the largest Romanian IT companies was arrested for tax evasion! I can’t say if Irina Socol is guilty or not. It’s judges’ job to determine to what extent the woman has indeed done what she was indicted for. What drew my attention in this scandal is the scheme that was used, according to the prosecutors, to avoid paying about 14 million RON to the fiscal authorities. 51 companies (in most of the cases the owners and directors were Roma people, some of them even illiterate) were invoicing fictive expenses, were receiving the money, were withdrawing it from the bank and then were giving it as cash to the Siveco bosses. The fee for these rogueries, which some of those involved already admitted to have committed, was less of three percent.

This was a typical case of tax evasion. But what was the reason behind the partnership between some very financially solid people, members of the Bucharest’s social elite, and some inhabitants of the famous Sintesti commune? Was it only the greed? The powerful IT company signed, only this year, public procurement contracts amounting 70 million EUR. In the past seven years, according to the Evenimentul zilei daily, the value of such contracts reached the breathtaking amount of 300 million EUR. It’s not bad, I believe, taking into account the world crisis that started in 2008. During rough times, such contracts provide the safety and comfort that few top managers could say they ever had. So the company flourished and the money poured into its accounts like water in a thirsty man’s glass.

I believe this case is not singular in Romania. It’s somehow natural to try to “fiscally optimize” your business model. All businessmen do it, all over the world. The present case is a good example of the effects produced by the oversized taxes which go beyond the business environment’s endurance limit:  people are more and more tempted to steal! The more they steal, the more the public budget shrinks. And an incompetent government doesn’t know how to react to this phenomenon but by raising the taxes even more. You recognized, of course, the current situation in our country. However, I find it strange that in this case the “optimisation” was realised in such a gross and easily to spot manner. A scrap iron trader providing expensive services to an IT company is more strident than Oana Zavoranu at the Romanian Academy Ball. Why didn’t they use the classic row of contracts with offshore companies as in other famous cases?

I can only think of a reason: the acute and rapid need to have cash in hand. Nicely stacked notes, unrecorded, odourless, that could be easily manipulated without leaving any trace. This could be the main reason and also the secret of the miraculous success the said company registered during its relationship with the government. And we are back again at the famous generalised corruption that we all know. We, the honest workers who see their money shovelled into the mouth of the wonderful socialist government, in the name of the social equity. That’s why I can’t believe in a state organisation which implies the same entity is simultaneously regulator and player on a market. That’s why is crucial for the economic development to have a capitalist country whose institutions are paid from taxes, not from their direct involvement in the business environment. That’s why we have to understand we can’t reach any of our goals without an independent justice.

Claudiu Serban, Editorial Manager, Capital