From EU Green Paper on VAT:
"The current collection model brings with it a VAT Gap due to e.g. VAT fraud, insolvencies, mistakes by the taxable persons in the VAT return and VAT avoidance schemes. Desk research shows that the VAT Gap for 2009 can be cautiously estimated at 6,9% of GDP and 12% of total VAT liability in the EU-27. This means that, in the EU-27, a total of EUR 118,8 billion has according to those estimates not been collected by the tax authorities in 2009."
And it is our money - taxpayer's money. So we should see to it that it is collected (taxes can then be lowered) and that the collection is made automatic - cost efficient for enterprises and tax authorities:
"The complexity in the VAT rules results in administrative burdens for businesses. Dealing with VAT accounts for almost 60% of the total burden measured for 13 priority areas identified under the Better Regulation Agenda. According to business, this is making the EU a less attractive place to invest."
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2 comments:
The answers have been clear - and available - for a number of years, as to how to greatly reduce this ludicrous waste of taxpayer's money. Collecting VAT at the time of payment, rather than delayed invoice, would eliminate much of the problem; and reduce much of the administrative burden for companies and tax authorities.
Secondly, collecting intra-EU VAT would eliminate the current carousel fraud at a stroke - and would really give some meaning to an open market throughout out the EU.
These functions are entirely available; modern technology makes a central clearing function for tax policy to be simple to apply.
Indeed, the UK's PAYE policy document suggests we can go one stage further and look at incorporating an electronic settlement system from wages through VAT collection.
So, why has this not happened? The usual answer; the inability (or lack of rationality) of 27 increasingly diverse governments to agree UNANIMOUSLY on any tax policy change.
But there are other factors as well. The VAT 'experts' within large companies have a built-in reason for resisting such simplification and modernization, namely 'job protection'.
It is time for finance directors to look at the savings they could make by simplifying the PAYE and VAT payments, not what complicated schemes can be invented for avoiding payments - and maybe see if politicians could ever be persuaded to do something for the benefit of the 'club' they are members of, rather than just how to hinder all the other members.
Chris Williams
Chairman
RTvat and RTpay
cwilliams@rtvat.eu
This time we are not going to give in!
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