BRATISLAVA, January 5, (WEBNOVINY) – The Ministry of Finance of the Slovak Republic claims that the so-far efforts and tools to eliminate tax frauds, particularly regarding VAT, are insufficient. To improve this situation, the department has tailored a series of measures aimed at efficient elimination of opportunities for frauds and prevention of their further escalation. However, the measures do not pose administrative obstructions to development of business conduct of enterprises that observe laws. Adoption of the proposed measures and their consistent implementation will help achieve a state when VAT frauds will be only possible by costly and less attractive means, explains the ministry in the blueprint of the plan to fight VAT frauds, which has been submitted for interdepartmental review.
An analysis of the present portion of black economy on the shortfalls in state revenues from VAT, inspections and of the amount of irrecoverable tax arrears has revealed the need for an entire series of measures, starting from the pre-registration processes, different attitude towards selection of entities to undergo inspection, the inspection process itself to recovery of tax arrears.
The department suggests among others that the content of application forms for VAT registration be extended by information that might indicate the risk rate on the side of the applicant; for instance, age, ethnic affiliation, information on employees or intentions to carry out intra-Community transactions. Also, a register of persons should be prepared who were informed by the tax administration that they have been identified as individuals participating in suspicious commercial activities. Moreover, VAT security deposit might be introduced for entities with which the recovery and payment of tax might be unsuccessful.
Revenues from VAT make up a considerable portion of all state budget revenues. In 2008, the VAT revenues stood at EUR 4.62 billion, while the indicator dropped to EUR 4.23 billion a year later. The ministry attributes this decline particularly to deteriorated economic development as a result of the global economic crisis, shopping tourism in Hungary, Poland and the Czech Republic and stronger efforts of people to reduce spending. To a certain extent, adoption of some legislative changes (crisis measures) also contributed to this development.
SITA
