Spanish Fraud Prevention and Correction Plan
March 5th, 2010
The Spanish Cabinet today approved the Fraud Prevention and Correction Plan for tax, labour and social security, in order to respond to changes in the type of fraud taking place due to the current economic crisis, especially in relation to the black economy and undeclared work.
The plan was announced at a press conference by Maria Teresa Fernandez de la Vega (the Deputy Prime Minister) and Elena Salgado (Second Deputy Prime Minister and Minster for Economy and Finance), who stressed that the plan includes 60 measures that will be “immediately” aimed at fraud prevention by coordinating the collection of information, improving the effectiveness of control over fraud and cooperating in the recovery activities through better collaboration between government agencies.
The Government expects the revenue recovered by the plan to amount to 0.1% of GDP (about 1,000 million euros) in 2013 which will help contribute to the consolidation of public finances. De la Vega said the plan will strengthen the fight against tax havens and fraud with three main objectives: to defend the social model, to ensure the financial sustainability of the government and to protect the equality of citizens before the law.
The plan incorporates new tools for sharing the information available to the Inland Revenue, Social Security and Labour Inspection departments. It foresees the creation of joint databases to increase the operating efficiency of the available information. The new plan also includes joint control actions that will focus on those areas of risk that are more likely to conceal paid activity and undeclared work. For example, inspections will be carried out on apparently insolvent companies in which activity is detected or trace evidence of illegal trade is detected.
The Government also envisages the creation of a joint commission between the Inland Revenue, Social Security and Work Inspection to coordinate their recovery actions in special cases and bankruptcy proceedings, including seizure and recovery. For employers and employees, the plan will encourage voluntary compliance with tax obligations by reducing administrative burdens and by making their tax and social security obligations more transparent and straightforward. Salgado also said that the government is working actively with the EU to eliminate tax havens, which she considered a priority, along with fraudulent VAT practices and other deceptive cross-border activities.
The new plan is in addition to specific initiatives that the revenue, labour and social security agencies have been already been developing in recent years. These existing initiatives have enabled the Spanish Inland Revenue to recover more than 35,500 million euros since 2005, while direct workplace action has led to a further collection of 1,425 million; and labour inspection has generated more than 960 million euros.
Related Posts
- 20% of Spain’s GDP In Underground Economy
- Spanish Retirement Age To Rise To 67
- Part time workers to pay Social Security
