Fighting VAT fraud – the circle tightens

Estimation is that each year HUF 130 billion is missing from the national budget as a result of VAT fraud in the food sector, due to the very high 27-percent VAT rate.

A recent conference on food chain control revealed that although those who commit the frauds are more and more cunning, the authorities are getting smarter, too. Gábor Horváth, head of department in the National Tax and Customs Administration (NAV) spoke about those IT methods that can help finding the VAT criminals. In getting to them the new E-road toll system is also helpful as the register can help keeping track of who goes where, with what kind of goods. Actors in the food chain are checked regularly. Committing VAT fraud is the simplest with food products such as sugar, vegetable, fruit, cereal grains, confectionery, chocolate bar, livestock, meat, meat product and flour. Thanks to an increasingly comprehensive data exchange between various authorities and development in information technology, transportation documents can now be checked quickly even at road controls. It turns out in minutes whether there is any problem with the freight. We can see the increased efficiency of inspections – and the spreading of news about the growing number of checks – from the fact that at a given border entry 5,700 trucks used to enter the country before stricter control measures were introduced: now this number is down at 2,800 trucks – experts say this rapid reduction in the number of truck entries shows that VAT criminals want to avoid controlling authorities.