EU countries still losing billions in VAT due to fraud


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Accra, Sept. 21, (DPA/GNA) – EU member states
lost almost 150 billion euros (177 billion dollars) in value-added tax (VAT)
revenues in 2016, with a third of that estimated to be due to fraud, the
European Commission announced Friday.

VAT is a consumption tax charged on most goods
and services and is an important contribution to national budgets, helping to
fund domestic public services as well

Accra, Sept. 21, (DPA/GNA) – EU member states
lost almost 150 billion euros (177 billion dollars) in value-added tax (VAT)
revenues in 2016, with a third of that estimated to be due to fraud, the
European Commission announced Friday.

VAT is a consumption tax charged on most goods
and services and is an important contribution to national budgets, helping to
fund domestic public services as well as feeding into the EU’s spending pot.

“[A] loss of 150 billion euros per year
for national budgets remains unacceptable, especially when 50 billion euros of
this is lining the pockets of criminals, fraudsters and probably even
terrorists,” EU Economy Commissioner Pierre Moscovici said in a statement.

The so-called VAT gap is calculated by
comparing a country’s expected VAT revenue with the amount actually collected
in a given year.

Tax collection improved by an average 1.1 per
cent across the EU in 2016, bringing in an additional 10.5 billion euros, the
commission calculated. The figures differ widely between member states,
however, ranging from a VAT gap of 0.85 per cent in Luxembourg to 35.9 per cent
in Romania.

Besides fraud, other reasons why governments
may lose out on VAT revenues include tax avoidance and evasion, bankruptcies
and miscalculations.

The commission urged member states to adopt a
series of VAT reforms it proposed last year, aimed at improving collection
rates. It called on governments to approve the revisions ahead of next year’s
European Parliament elections in May.

GNA


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