EU Must Fight VAT Fraud Now

12.00.00am UTC (GMT +0000) Wed 31st May 2006

Sharon Bowles MEP, Liberal Democrat Economic Spokesperson, has today given a cautious welcome to the Commission's plans to launch a debate on combating tax fraud.

Sharon Bowles said:

"I certainly don't object to the Commission looking into a full review of this issue but it must not stop firm action now. The current VAT system is beset with fraudsters and trading scams that simultaneously claim back VAT, charge a VAT inclusive price to the consumer, and don't pay a penny of it to the taxman.

"We need to address this "carousel fraud" immediately by allowing countries to apply a targeted reverse charge system for areas where this VAT fraud is rife - notably mobile phones and computer chips. Further measures could be added after the review. "

Last year HM Revenue & Customs estimated that VAT fraud was costing the UK over £1bn a year.

ENDS