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Tax authority woes leave Danish state out of pocket by billions

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Tax authority woes leave Danish state out of pocket by billions
Photo: Sarah Christine Nørgaard / BT / Ritzau Scanpix
13:15 CEST+02:00
Several years of technical problems at Denmark tax authority Skat have resulted in a further increase in the amount of money owed by taxpayers to the state, with the figure growing by nearly nine billion kroner from 2017-2018.

The increase in money owed via Skat was reported by Fagbladet 3F, based on Statistics Denmark figures.

Unpaid tax, unpaid police fines and a large amount of other unfulfilled demands for payment increased the overall debt to 117 billion kroner, the media reports.

Per Nikolaj Buch, and economics professor at Aalborg University, told Ritzau the figures were damaging for citizens' sense of justice.

“It is very problematic for the financing of our welfare society, and an insult to the sense of justice of anyone who pays their tax, VAT and bills that there are others who do not pay their debts and owe billions of kroner,” Buch told Fagbladet 3F.

The professor named serious problems implementing a new digital reporting system, EFI, as a key reason for Skat being unable to efficiently track payments owed to it.

According to a Skat estimate, the majority of the 117 billion kroner it is owed cannot be recovered, due to individuals being too poor to pay or because the debts are tied to bankrupted companies.

Christen Amby, a tax practitioner and member of the Tax Law Council, an advisory board to the Ministry of Tax, said that individuals and companies were less likely to comply with tax rules in a dysfunctional system.

“The desire to pay tax decreases when the system for reporting does not function properly,” Amby told Fagbladet 3F.

Since Skat also carries out debt recovery for other sectors of society, the problem has the potential to spread, he added.

“That could be something like the ability to pay a police fine or a charge for taking a train without a ticket. The will to pay for these things also falls away when the billing system does not work,” he said.

READ ALSO: Denmark vows to recover billions stolen in tax fraud

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h2w4 - 29 May 2019 05:15
I wonder when tax money funds gets tight will the relaxed Danish style of automatically trusting everyone be the big loser because of these cases?
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