March 12, 2010
Ainsworth on ZappersRichard Thompson Ainsworth (Lecturer, Boston University - School of Law) has posted Zappers - Retail VAT Fraud on SSRN. Here is the abstract:
Tax losses in the EU can be estimated at approximately $23 billion per year in the restaurant sector alone. Germany tops the list followed by the UK, France, Italy and then Spain.
Country Revenue Loss (in millions) Country Revenue Loss (in millions)
Austria 508.7 Latvia 58.4
Belgium 600.5 Lithuania 100.1
Bulgaria 45.9 Luxembourg 79.2
Cyprus 33.4 Malta 16.7
Czech Republic 404.5 Netherlands 1,042.5
Denmark 316.9 Poland 1,030.0
Estonia 41.7 Portugal 362.8
Finland 296.0 Romania 417.0
France  3,294.3 Slovakia 183.5
Germany  4,503.6 Slovenia 87.6
Greece 529.6 Spain  2,160.1
Hungary 304.4 Sweden 529.6
Ireland 291.9 United Kingdom  3,448.6
Italy  2,806.4
This is not the only marketplace where the tax/technology intersection is problematical. On a far larger scale MTIC (missing trader intra-community) fraud is also a technology driven theft of public revenue by criminals. These frauds include the well known carousel frauds in cell phones and computer chips, MTIC fraud in CO2 permits, the yet to be fully investigated VoIP MTIC, as well as MTIC in the electricity and gas exchanges.
Tax authorities are fighting back all along the technology front. There are intensive traditional audits as well as concerted efforts to blunt the effectiveness of the fraud with technology. But, if there is one distinguishing characteristic of Zapper enforcement efforts it is that here the authorities are embracing technology-based solutions. This effort to fight technology-with-technology has produced a measure of success as well as helped develop strategic partnerships around solutions. Cooperation is evident.
March 12, 2010 | Permalink
I have yet to hear about this happening much in the U.S. Aside from restaurants running POS systems with SQL bringing in techs to write modified reports that show a certain percent of less cash. The bar and restaurant business sure can be shady.
Posted by: Ryan F. | Apr 24, 2010 5:45:42 PM
Ryan F.....you are one VERY NAIVE individual if you do not think this is happening much in the U.S. Trust me, it is.
Posted by: Hongster | May 27, 2010 12:09:40 PM