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Case Study in Corruption: Realitatea-Catavencu defrauds the Romanian People
The present anti-corruption investigation of the Romanian Press agency, Realitatea-Catavencu, is an interesting example of how difficult it is to overcome corruption.
Realitatea-Catavencu is a major media group in Romania that includes television, radio, print and new media networks including The Money Channel, Academia Catavencu and Realitatea TV (one of the leading news channels in Romania). This group is currently being investigated for tax-evasion practices on a sophisticated level. In lieu of a complete salary payment that is commensurate with the duties and responsibilities of a position at Realitatea-Catavencu, employees receive part of their salary in the form of compensation for intellectual property contributions.
In other words, Realitatea-Catavencu paid employees the minimum salary as salary and additional amounts of a negotiated salary through compensation for intellectual property. Realitatea-Catavencu used this scheme to evade the higher taxes on officially registered salaries. Salary taxes and various mandatory contributions can reflect up to 100% of a net salary, whereas taxes for compensation for intellectual property is about 16% . Read the rest of this entry »