Estonian tax authority puts 2012 VAT fraud losses at EUR 222 mln

Photo: Arvet Mägi/Virumaa Teataja

According to preliminary data of the Estonian Tax and Customs Board, VAT losses due to fraud amounted to 222 million euros last year.

VAT revenue totaled almost 1.5 billion euros in 2012, thus the losses formed nearly 15 percent of the receipts, the tax authority said on Thursday.

In the last three years VAT fraud losses have ranged from 180 to 230 million euros annually. In 2010 the loss caused by dishonest businesses was 180 million euros and in 2011 it reached 231 million euros. The state thus lost a total of 633 million euros of revenue in the last three years.

Deputy director general of the Tax and Customs Board Egon Veermäe said the figures clearly show that fraud is extensive and it's by far not a question of a few businesses. In his words, the tax authority is aware of close to 10,000 businesses in whose case there are grounds to suspect VAT fraud. "Considering that there are in Estonia more than 70,000 undertakings liable to value added tax, we cannot talk about single enterprises in the context of VAT fraud but as many as 12 percent," he said.

The turnover of such companies added up to six billion euros last year whereas the overall turnover of Estonian companies totaled 51 billion euros. "Such a level of fraud and number of cheats is too high to rectify the situation with subsequent checking, it is necessary to constantly search for solutions to avert such consequences," Veermäe said.