Poland’s Ambitious Plans for Fighting VAT Fraud
This month, Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, bluntly stated:
Twenty-five years after the creation of the Single Market, companies and consumers still face 28 different VAT regimes when operating cross-border. Criminals and possibly terrorists have been exploiting these loopholes for too long, organizing a EUR 50 billion fraud per year. This anachronistic system based on national borders must end.
In order to deal with this perceived problem, specific changes to the VAT Directive should be announced in coming months. The Commission hopes that, if everything goes according to plan, a new system could be implemented in 2022.
However, the European Commission is not the only organ that has declared war against VAT fraud, but some Member States have made increasing VAT compliance a key priority as well. The Polish Ministry of Finance, for example, expects (and needs) to see significant success in this realm. According to the Ministry, for 2017 VAT revenues will increase to 150 billion zlotys, while in 2018, 166 billion zlotys are expected as incomings. According to CASE calculations, should this optimistic forecast comes true, the VAT gap (the difference between VAT revenues expected by government and those actually collected) will decrease by 17 % in 2017 and by a further 13 % in 2018.
Photo: Pixabay
