The EU’s anti-tax fraud program Fiscalis will see a bigger budget in the upcoming budgetary period after the European Parliament approved a revised version of the budget, which assumes that cooperation breakdowns between various tax bodies will be made public and officials from developing and developed countries will have to attend a joint training session. At the moment, the failed cases of cooperation do not need to be published.
EU lawmakers decided that 339 million euros will have to be found, which is 10 percent higher than the EU Commission’s most recent estimate for the long-term finance pool. The increase garnered support but also met with rejection mostly coming from the Eurosceptic MEPs. “So far, we have only put money into increased cooperation, but we knew little about the real problems,” MEP Sven Giegold (Greens), the rapporteur for the program, commented. Mr. Giegold believes that tax law harmonization will be needed to deal with cooperation between authorities so that they can effectively combat tax avoidance and fraud.
Moreover, VAT systems would have to be changed because businesses often had their input tax refunded for transactions for which VAT is not paid for. EU tax chief Pierre Moscovici added that with this deal, more support will be made available for EU member states to find creative solutions to common problems faced by tax administrations. The Commission also hopes that new technologies could be leveraged for this purpose as well. While the program is still comparatively small, Mr. Moscovici is convinced that one can make a lot of the “bang for the buck”. The new financial injection will not only bring value to EU member states but also developing and emerging countries.