Ministry of Justice Wants Severe Penalties for Fraudsters

The Ministry of Justice is 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 a 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 from the Ministry of Justice, tax fraudsters face penalties for 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.

The Ministry of Justice Concerns Over VAT Fraudlers:

VAT fraud, often in the form of VAT carousel, causes substantial damage to the Polish state budget. According to the estimates of the Supreme Audit Office, the 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 is never settled in the first place. The proceedings are performed on a large scale.

In recent months, the Ministry of Justice has been launching numerous initiatives that are to bring the state tax revenue up. These include the introduction of unified control files to facilitate tax inspections and a general clause against tax evasion that is to counteract the performance of artificial, unreasonable transactions 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 an 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 fuel trade 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, 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 of Justice will soon publish a report on this. When it comes to VAT tax alone, the revenue was greater by 3.5 billion PLN.