Interview with Patrik Berglund, Swedish Tax Agency Expert

1.Since 2018, there is a productive collaboration between Skatteverket (Swedish Tax Agency) and Moldovan State Tax Service, managing to obtain results that benefit primarily the citizens of Moldova. Could you tell us more about those results? What has been achieved till now? What challenges have been faced? What are you working on now? 

The project is working with three major development areas, Human Resource Management, Automatic exchange of information and Tax Arrears management. 

In the scope of the HRM-component, the project is aiming to strengthen and develop the leadership at the STS as well as the authority’s capacity to work with competence development. So far the project has supported the elaboration and implementation of a new leadership policy. Prior to the project, the STS did not have any consistent and continuous in-house process for leadership development. Neither had the STS determined the desirable leadership philosophy, which should be applied by the STS-managers in order to promote efficiency and stimulate commitment among the staff to fulfil the strategies and objectives of the organisation. The new policy points out the direction for the STS leadership and act as a platform for the development of the existing and future managers at the STS. As an example, the policy stresses the importance of having good communication abilities as a manager and using feedback as a tool for development of leaders and co-workers. The implementation of the principles of the policy is under way through discussions and interventions by the HRM-department with managers throughout the organization. In addition, the leadership development process will be further accentuated through the introduction of a new leadership training.

In the area of competence development, the project has supported the STS and in particular the HRM-department to strengthen and improving its abilities to design, produce and deliver relevant trainings for its staff. The project has introduced and shared experiences from the Swedish Tax Agency regarding concepts, methodologies and processes applied in these areas. Furthermore, the project has supported, as mentioned above, the development of a new leadership training, both a classroom and a digital version. In connection to this work, the project has also supported the STS trainers who will carry out the trainings. 

In the area of automatic exchange of information (AEOI), the project is assisting the Republic of Moldova and the STS in implementing an automatic standard for exchanging information on financial accounts with other countries and tax agencies. Exchange of information (EOI) for tax purposes is a valuable tool for enhancing global transparency and cooperation. AEOI is a proactive tool; it can inform countries of its residents’ wealth and capital incomes including interests, dividends and proceeds from sale and such that has been concealed offshore, undetected, and escaped tax. It simultaneously deters future noncompliance. The standard that is being implemented by the STS and the project is called Common Reporting Standard (CRS) and has been developed by the OECD. The implementation covers multiple aspects such as domestic legislation, confidentiality and data protection safeguards, business processes and rules and IT-development. Due to some external factors including the Covid-19 pandemic, there has been some delays in the implementation process. Possibly, the Republic of Moldova and the STS can start exchanging information with other jurisdictions in 2022, or at least no later than 2023.

In the tax arrears management component the project is supporting the STS on a number of different topics. The project has concluded initiatives regarding the drafting of legal amendments, which include the areas of postponement/instalment plans, enforced sale of property and subsidiary liability. The draft bills have been sent to the MoF who is currently assessing the proposed amendments. The project has also finalised the work relating to mutual assistance on international recovery, investigation of addresses for debtors who reside in foreign countries and enforcement of other public debts than tax debts. Additionally, the project has provided support to create and promote a school information campaign, with the aim to inform future taxpayers on matters regarding the role of the STS and the importance of paying taxes etc. The campaign was launched and implemented in late 2019. Approximately 75 schools and 3000 students received the information and interacted with the STS. The campaign was well received by both the students, teachers and school management. 

The challenges encountered during the course of years have been many. The Covid-19 pandemic have affected the project in many ways, especially since travel restrictions was introduced, preventing the project from sending Swedish experts to Moldova as well as hosting representatives from the STS in Sweden, during most of 2020. Since March 2020, the project partners are conducting their cooperation through digital meetings. Introducing new aspects of leadership and trying to change the way leaders/managers are applying their leadership has also been challenging, due to cultural aspects and a traditional view of the role of leaders/managers in Moldova. 

2. Mr. Berglund, as a tax audit expert who is sharing expertise by working side-by-side with Moldovan colleagues, what are the Moldovan State Tax Service institutional transformations that you appreciate and what needs to be done so that Moldovan State Tax Service can gain the trust of the citizens and the business environment?

Since a few years back the STS has embarked on a journey with the objective to deliver more and better services to the taxpayers of Moldova. Of course, compliance and control is continuously important, but providing the taxpayers with the services they have the right to demand as well as advices and support in different tax matters is just as significant. I think this is an urgent issue and the STS needs to emphasize this transition much stronger. By doing so the STS will gain higher trust among individuals and businesses in Moldova. However, a major problem in Moldova is the low level of trust citizens have in state institutions such as the government, parliament and the justice sector as well as in the political parties. This low level of trust risks spilling over to the STS and creating a downward negative spiral. 

3. A 2019 survey by market research institute Kantar Sifo concluded that the Tax Agency has the ninth best reputation of 40 major Swedish public bodies. Why Swedes are ok with paying taxes?

I think there is a general understanding in Sweden that if we want to have a strong welfare sector and state, which provides its citizens with qualitative education, good healthcare and other social services for all citizens, we have to pay for it. And we do so by paying taxes and comply with our obligations as citizens.  Of course, not everyone in Sweden is happy paying taxes, but I think most taxpayers have faith and trust in that the STA is doing a professional job and that we treat them with respect and fairness. This is fundamental. If taxpayers do not trust the tax authority, if they think we are corrupt or not processing cases in accordance with the rule of law and transparency, they would not be eager to comply. However, during the last few decades, the STA has managed to build high trust among the Swedish public and that is a major reason to why we score such good marks in the surveys. Just as the STS in Moldova, the STA has made a transition from mainly being a controlling body that sanctions taxpayers in retrospective, to an authority that provides services the taxpayers appreciate. Moreover, we are trying to simplify procedures, which make it easy to comply with the rules and obligations from the very beginning. I believe this is a valued approach among Swedish taxpayers.

4. Living and working in Moldova for the past 2 years, what have you been enjoying in Moldova mostly? Is there anything that Swedes could learn from Moldovans?

I basically enjoy every aspect of living and working in Moldova. I have very friendly and professional colleagues at the STS who fully support the project and take good care of me. I enjoy the countryside with its many wineries and beautiful sights to visit. Chisinau, my new hometown, is a calm, peaceful and pretty city with many nice parks and buildings. The city also offers many good restaurants, which I like to visit. The wine and food is usually excellent and I have learned to appreciate the Moldovan cuisine. I am also trying to learn Romanian, which has been quite the experience. I was not aware that Romanian grammar would be so difficult, but it is a beautiful language and I am making some progress. 

I think Moldovans are resilient and tough and they don’t lament particularly over problems or missed opportunities. Instead, they soldier on. The country and its citizens have not had an easy journey since the independence and have had to overcome many major obstacles and disappointments over the course of years. Maybe this have taught the Moldovans resilience and patience, which are features I sometimes miss in Sweden. I also think that Moldovans are very able, they live closer to nature in the sense that everyone knows how to grow plants, fruits and such and they stay connected to certain cultural traditions, that maybe we in Sweden have forgotten about. 

Thank you very much and best of luck.