The Romanian Tax Administration (ANAF) will modernize over the next five years thanks to a EUR 77 million budget, most of which will come from the World Bank.

With a low tax collection rate and a 33 percent ratio of budget revenues out of the country's GDP, Romania needs to reduce tax evasion and reorganize its tax administration offices.

Around three quarters of the money will be spent on IT systems, which should help with simplifying ANAF's structure.

A similar modernization project was undertaken by Bulgaria, also with the help of the World Bank.

Given a timeframe similar to Romania's proposed scheme, Burgaria's modernization saw cuts in regional tax administration offices and resulted in an increase of 6 percentage points of the GDP in the tax collection.

Romania hopes to increase voluntary collection by 5 percentage points and see a drop in the cost of tax collection, as well as have more satisfied tax payers.

The program is set to start this October and by 2016, ANAF's territorial structure should be reorganized, with staff from redundant areas moving to regions with staff shortages.

Its IT&C system should already be modernized by 2016, while its activity processed re-arranged.

Romania agreed with the IMF to turn the existing 221 financial administration offices into eight regional offices and 47 local ones.

The regional offices will be located in Iaşi, Galaţi, Ploieşti, Craiova, Timişoara, Cluj-Napoca, Braşov and Bucharest.

editor@romania-insider.com