22nd December 2017
In recent months many of our blogs have highlighted cases of people and businesses caught out in fraudulent schemes and the investigations that authorities have undertaken in the fight against tax evasion. But what impact is all this activity really having on governments worldwide? If Poland’s success is anything to go by, the results are certainly worth the effort.
A report released by the United Nations Compact Network earlier this month revealed that Poland had reduced the tax-evading segment of its economy by 1% in the last 12 months, meaning this unregistered section now makes up just 11% of its total economy. While this figure may appear small, the study suggests that this reduction in evasive activity has increased the government’s annual revenue by around €4.76 billion.
However, according to Marian Banas, the head of the country’s National Revenue Administration, tackling fraud is not just about recovering funds. As the government continues to invest in the development and growth of the country’s businesses, this clampdown on evasion will create a more equal playing field for everyone.
While this achievement is certainly down to a variety of initiatives in the country, one of the more innovative methods used was the introduction of a National Receipt Lottery. In an incentive to encourage people to claim receipts for goods and services, the lottery sees one receipt drawn each month with the winner claiming a car as a prize. This move targeted those business people attempting to hide their income and has certainly proven successful to date.
Is tax evasion heading for extinction?
While this may seem like a small move in the fight against global tax evasion, the success of the Polish government really does send a clear message to fraudsters: evasion will not be tolerated. As more authorities worldwide target evaders, wrong-doers are running out of places to hide.
In our view, it simply isn’t worth considering evasive schemes. Compliance across borders should certainly be a top priority for recruitment firms placing contractors abroad as the risks associated with incorrect tax payments grow. Find out how your firm can benefit from a partnership with 6CATS International today.