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“Tax evasion and tax fraud undermine the tax base and make honest citizens and businesses pay the taxes avoided by frauds. Tax fraud affects the economy and finances of every country, and it is a problem for the entire European Union. As a result of tax fraud and tax evasion, every year the EU loses at least EUR 200 billion, which is half of the EU’s budget,” said Raimonds Vējonis, President of the Baltic Assembly, on Friday, 27 September, as he opened the parliamentary seminar of the Baltic Assembly and the Benelux Parliament on Coordinated Strategy to Improve the Fight Against VAT Fraud in the European Union held in the main building of the Saeima.

The President of the Baltic Assembly stressed that fraud reduces national budget expenditures for health care, education and research. Furthermore, allowing tax fraud is unfair to citizens and businesses that honestly fulfil their commitments. Finally, fraud distorts competition and thus leads to market dysfunctions.

“Taxes are not an aim in themselves but rather a public tool for achieving politically approved goals, such as bridging the income gap, taxing hazardous activities, and establishing an economic framework for social assistance services,” Vējonis pointed out and emphasised that a good tax system relies on a fair and broad tax base and reasonable tax rates.

It is a proven fact that the higher the taxes, the more taxpayers will try to find ways to avoid fulfilling their obligations. Overly complex tax systems, as well as confusing interpretations of legislative acts and various tax exemptions, are also detrimental, said the President of the BA.

Heinz Zourek, Director General of the Directorate General for Taxation and Customs Union of the European Commission, informed the participants of the seminar that the first plan for combating VAT fraud was adopted in 2006, and at the end of this year the first results of the fight against VAT fraud at a European level will be known. Zourek also emphasised that the fight against VAT fraud ought to be conducted also in cooperation with third countries.

It is high time to begin a serious fight against so-called carousel fraud, which is at the root of organised crime, emphasised Yannic Hulot, former President of Eurofisc. Comprehensive analysis of cross-border data is crucial in order to identify participants of VAT fraud networks, Hulot said.

The seminar was attended by members of Baltic and Benelux parliaments, representatives of the European Commission and the GUAM Parliamentary Assembly (Georgia, Ukraine, Azerbaijan and Moldova), as well as representatives of tax administrations of Latvia, Estonia and Lithuania.



Photos from the seminar are available at: https://www.flickr.com/photos/saeima/sets/72157635938371135/
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