The German Tax Union estimates that tens of billions of euros in taxes are being evaded in industries that involve a lot of cash payments. Tax offices should therefore change their approach.
The Federal Chairman of the German Tax Union (DSTG), Florian Köbler, has called for a change in strategy by the tax authorities in order to take more targeted action against tax evaders in sectors with a lot of cash payments. These include hair salons, bakeries, butchers, retail companies, the car trade, ice cream parlors and restaurants.
“For example, a sensible digital risk analysis by the tax office is necessary. Mainly the cases in which there are anomalies in the risk system will then be examined more closely,” Köbler told the newspapers of the Funke media group (Tuesday). This would allow the tax offices to concentrate on cases in which fraud is actually taking place.
The risk of being discovered as a tax evader in the so-called cash sector is still too low, said Köbler. On average, small businesses are only audited every 80 years. The damage is correspondingly high. “We estimate that 16 billion euros in taxes are evaded directly in the cash-intensive sectors. The overall economic damage, including, for example, unpaid pension and social security contributions and various types of taxes, is likely to be around 70 billion euros a year.”
In contrast, the potential for tax fraud among employees and pensioners is significantly lower, said Köbler. Tax offices should therefore not get lost in the minutiae.
Source: Stern
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