Minister of Justice wants severe penalties for fraudsters

The Ministry of Justice in working on a bill introducing heavy penalties for persons involved in VAT fraud. According to media reports, acting to the detriment of the State Treasury may be subject to the penalty of up to 5 years in prison.

However, in return for cooperation with state authorities, i.e. returning stolen assets and providing information on other persons involved in the fraud one may count on the penalty being less severe.

According to current regulations, tax fraudsters face penalties in the amount of several thousand PLN. If you take into consideration the fact that a single fraud scheme may lead to millions of PLN of lost revenue, clearly some amendments need to be introduced.

VAT fraud, often in the form of VAT carousel, causes substantial damage to Polish state budget. According to the estimates of Supreme Audit Office, Polish Treasury loses around 50 billion PLN per annum due to tax evasion.

Such crimes are usually carried out by professional, organized crime groups. By providing fake documents, they apply for reimbursements of the paid VAT tax. OF course, the tax are never settled in the first place. The proceedings are performed on a large scale.

In recent months, the government has been launching numerous initiatives that are to bring the state tax revenue up. These include the introduction of unified control files are to facilitate tax inspections and general clause against tax evasion that is to counteract the performance of artificial, unreasonable transaction whose sole purpose is to bring tax obligations down.

Another step towards stopping tax evasion was taken by the President of Poland, Andrzej Duda, who signed a set of bills, the so-called “fuel package”, the goal of which is to limit the VAT gap. The package, which includes amendments to the VAT act, excise duty act, the energy law act and the act on fuel stocks, will affect companies involved in intra-Community fuel transactions.

The package will enter into force in August and is expected to give the budget additional 2.5 billion PLN a year. Fuel importers will now need to pay applicable VAT tax within five days of the moment the fuel enters the domestic market. Licenses for trade in fuel are to be granted solely to enterprises registered in Poland or with branches in Poland.

In an interview on Tuesday, Piotr Szałamacha, the Minister of Finance, has revealed that due to government actions tax revenue has already increased by around 6-7 percent taking into consideration the recent six months. The Ministry will soon publish a report on this. When it comes to VAT tax alone, the revenue was greater by 3.5 billion PLN.