Wednesday, October 31, 2007

Fight VAT-Crime: outsource your billing to the tax man!

The Dutch financial newspaper "Financieel Dagblad" reports on a scheme to fight VAT-fraud. The idea is quite simple. Let's use electronic billing in the EU and send a copy of every bill send in the EU towards the tax-service! This idea by mr. Wilbert Nieuwenhuizen sounds quite simple and with the total value of VAT-fraud exceding €100 billion it will probably be worth every penny that the tax-services invest in it. Electronic Billing in itself will save on average €25 per bill a copy to the tax man is easily made, so why should companies object.

Now as a telecoms and ICT guy, I like technical solutions to hard problems, but this one scares me. This could mean that the taxman pretty soon knows of any and all transactions in the country. On top of knowing whether the VAT paid and declared all matches up, they also know of any and all trades done in the country. Now I know that they can already get access to any and all trades that are on the books, by making a friendly phone call to a CFO, but this goes much further. What little privacy we have would be lost too. I would say instant Big Brother Award nomination!

So I propose the following. If the taxman knows al my transactions, then it should also do my books. Give me a monthly overview of how I am doing and if I run a business, how my business is doing. They know more than the accountant by now, so they can sign of on the books too. It can give me instant deductions on taxes when I qualify for them and give me an automatic extension of my payment term if my cash flow is not adequate. Than they are really useful and I'm willing to relinquish my privacy.

1 comment:

Anonymous said...

Thinking of new products for the firm already? :-)