Many countries are looking each year for ways to seal the functioning tax systems, looking for ways to increase the revenue to the state budget. The question is: does the economic objective always justify the measures?
VAT carousels are probably currently one for the most important reasons for the loss of the state budget. Tax fraud is taking advantage of the often changing market situation, leading to losses reaching one million Euros per year. With each such captured activity, only a fraction of the lost funds can be recovered. This is not an easy task, and more and more crime groups act in this way. What can officials then do to improve their tax revenues?
Recently, provocation is a fashionable word in the context of tax offices. Several first Google search pages after the entry of the slogan “invocation of the IRS” is flooded with articles and references to the already famous case of the mechanic from Bartoszice.
The Word of Introduction
They're coming to the auto shop. two Sir. The bet's officially closed because it's late. The ladies are asking for help because they have to go on tour. The mechanics are reluctant to agree. He checks the problem and then replaces the women's bulb - privately, outside the plant. In exchange for the service he asks for 10 PLN, The ladies, on the other hand, are asking for a receipt with official credentials.
Incentives of the controls resulted in a total "success" as a mandate was issued for the amount of 500 PLN. To the discontent of officials, the mechanic of the ticket did not accept. The case went to court.
There, the ruling panel acknowledged the right of representatives of the tax authority, but waived punishment, due to the low social harm of the act. The chief of the tax office made an appeal, clearly not agreeing with the lack of punishment. This is where, fortunately, this tragic story has come to an end.
Probably under media pressure, the warden withdrew from his claims allowing the mechanic to breathe relief. Wanting to Help second A man was left without punishment.
Street sales and tax office
That's not how lucky Mrs. Marianna was. Invalida I groups, years 90, A pension barely enough for medication. She made extra money for Christmas selling napkins in Radom, which she crochet in the evening. The IRS, like a ruthless investigator, got to her and gave her a ticket of 220 PLN.
Mrs Marianna did not have the opportunity (and probably health) to face the authority of the tax authorities. In this situation, an online community, outraged at the callousness of officials, began to help, and gathered a mandated amount.
It turns out that newlyweds can't sleep peacefully either. For several years now, tax offices have been paying close attention to wedding planners. Getting a letter from the IRS is certainly not a nice “present” for newly baked spouses.
Even people who pay taxes “on copper” can feel a surge of stress holding in their hands an envelope with an ominous acronym “US”.
It is true that the questions asked there, such as “Where and in what room were the weddings held?”, “Was there a photographer?”, “Who prepared the wedding dishes?” is not obliged to answer, there is a risk of punishment for ignoring the call of the IRS.
And this one, in the case of a witness, may reach high 2.8 you are PLN and can be renewed until the end.
Questions seem easy, but young couples often forget what happened on the day of the wedding, about gathering and documenting such expenses, not to mention. The matter is more complicated if the office asks for e.g. weddings concluded three Years ago.
It would seem that everything in order to eliminate the "grey zone" among wedding organizers, however, there are also questions about the value of gifts received in order to check whether, for example, the tax on donations should be paid. This means that newlyweds are also being checked.
Fiscal checks, do they make sense?
Many of these and other examples combine several common elements. Official overzealousness, citizen stress, interplay between private affairs officials and low social harm. A light bulb exchange service would contribute an amount to the budget 2 PLN and 30 Money. This is not even a promotion of the state's fiscal needs. Maybe. 500 PLN the mandate is already a much more interesting amount of officials, but it can be assumed that the costs incurred by the State in the whole dispute were higher.
Fighting tax fraud is not an easy task. It requires accuracy and scrupulousness, but we should not forget common sense and balance our actions. When, on behalf of the fight against fraud, ordinary citizens are suffering to help a woman in need, while millions of tax frauds are being made, it is a sign that the fiscal action is not going in the right direction. In addition, the morals of such provocations could be fought long disputes of ethical nature.
Source: Forbes
Author: Andrzej Dmowski
Lawyer and Doctor of Legal Sciences of the University of Warsaw. From 2011 one from Managing Partners in Russell Bedford Poland. Previously on the BDO advisory network, as well as Deloitte & Touche. Author of the book “Transfer Prices”, co-author of the commentary “The Corporate Income Tax Act”, author of many publications on tax law.