Economic crime report 2004 - Ekobrottsmyndigheten

EBM’s pilot project on measures for preventing economic crime in the
hairdressing, restaurant and peddling sectors suggests that information,
prodding and inspections are insufficient. Unless offences uncovered
during such inspections lead to prosecution and conviction, businesses
remain unfazed.
Values and Attitudes
Attitude surveys by both SKV and EBM indicate that young people today
lack the fundamental values and taxpayer morale of previous generations.
That may pose a serious threat to the future of the Swedish tax system.
Impact
There is no question but that the state loses several billion kronor in
uncollected taxes and fees every year. Although no overall empirical study
has been carried out, undeclared work appears to be on the rise. Agencies,
unions and trade associations have all testified to a steady increase.
15.4 VAT FRAUD
Behaviour that Constitutes a Threat
There are four basic ways of committing VAT fraud.
• A transaction is not declared and no VAT payment is made. Nor is
income tax paid for any profit associated with the transaction. Nor is
any selective purchase tax collected.
• VAT is declared but not paid, a frequent occurrence when bankruptcies
are being planned.
• Based on false grounds, excess input VAT is declared in order to
extort tax revenue from the state.
• Goods are smuggled into Sweden from non-EU countries in order
to sell them without having to pay income tax on the proceeds. As a
result, no VAT is paid either.
These general categories can be broken down into some 20 modes of
operation that have been well documented in both crime research and
the day-to-day work of agencies. As soon as agencies start to monitor one
type of fraud more closely, other methods crop up.
No reliable estimate is available as to the scope of VAT fraud, but billions
of kronor are clearly involved every year. Thus, the appropriation
of resources for an empirical study of how widespread the phenomenon
actually is would be an extremely useful step to take.
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