Tax Board arrests assets of construction company chiefs

Photo: Peeter Langovits

Tax and Customs Board (TCB) issued three liability decisions to heads of constructions companies who have left their firms behind with tax arrears. Within the procedures, four registered immovables belonging to board members have been arrested to cover the €90,000 plus tax arrears.

Eight misdemeanours related to unreported («envelope») wages, prevention of activities by tax administrators, or declaration of false VAT information are currently in procedures. For such activities, a legal person may be punished by fines up to €13,000, physical persons’ fines may amount to €1,200.

According to TCA control unit head Kaido Lemendik, building sector is not plagued by envelope wages only; value added tax fraud also occurs. «To pay envelope wages, the cheaters need money. The money is generated by VAT fraud. It is important to note that fraud like this may end in loss of personal assets. Peace of mind would indeed only be guaranteed by honestly following the rules,» said Mr Lemendik.

Mr Lemendik added that, during inspections of building firms in 2012-2013, explanations have been demanded from 3,867 people. «Of these, 1,044 were on their jobs for the first day, not showing up in any income or social tax declaration for the prior three months. Which reveals that, in construction, illegal labour amounts to 27 per cent.»