VAT fraud remains a major source of budget resources

During an election period, anti-fraud is often the magic ingredient that makes it possible to complete program funding. Republican candidate Valerie Pecres promised to recover 15 billion euros by tightening controls, as promised Marine Le Pen (National Rally), which, in addition, wanted to devote a new ministry to it, while Emmanuel Macron moved the fight. Against fraud as one of the tools that makes it possible to achieve savings of the same magnitude. Figures that specialists at that time considered optimistic, Fraud, especially tax fraud, is still very difficult to assess.

This is one of the conclusions of a media report released by the Senate Finance Committee on Wednesday, October 26th. 19 deputies from all political currents reviewed the results of the October 23, 2018 law on combating tax evasion, and made twenty recommendations. This text, which was adopted at the time after the revelations of a series of scandals, from the “Panama Papers” to “SwissLeaks”, aimed to better expose and punish fraud, in particular the creation of a new “tax police”, under the direction of Percy. The law also put an end to the notorious “lock” that reserved the tax authorities the right to initiate proceedings in matters of tax evasion.

The Senate report provides a fairly positive assessment of the law, with some proposed amendments. Thus the lack of fraud assessment remains one of the most problematic points. While tax audits have increased revenue since 2018 (+38% despite the health crisis, to €10.6 billion in 2021), thanks in particular to the increased use of artificial intelligence and the completion of some tax cases such as the Google case Its effectiveness is still difficult to measure.

The tax evasion figures actually vary from one to three, with Union of Public Finance – Solidere giving the highest estimate, between €80 and €100 billion, an amount that Percy disputes each year. The question remains unanswered, Senate report confirms. Was the IRS able to recover 10%, 20%, or 50% of the defrauded amounts? »

Complex patterns and hard to detect

Unlike many of its neighbours, France does not have a tool for assessing tax evasion – “The United Kingdom, the United States, Canada, Denmark, countries of the country or even Australia have such assessments, which are based on randomized and/or targeted examinations”points to the report, which calls for annual release of data by Insee and tax authorities, by 2024. “We will propose an amendment to the 2023 draft budget to follow up on this recommendation.”defines Jean-François Husson (Les Républicains), General Rapporteur on the budget in the Senate.

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