The total tax debt of Estonian taxpayers is around 6 billion kroons or 383.5 million euros and a large part of it is hopeless debts with which the state has to decide whether to annul them or not, LETA/National Broadcasting reports.
"A very large part of it is so-called hopeless debt where entrepreneurs with their management decisions have reached a situation where the chance of getting that debt is hopeless or very slim,” said Tax and Customs Board director general Enriko Aav.
There are 360 companies in Estonia that mediate fuel while in Finland there are just about ten. VAT fraud forms 85% of tax revenues that the state is deprived of and that figure indicates that the lifetime of freshly created fuel firms tends to be rather short. The scheme is simple: a few months of tax free operating, then bankruptcy and a new company.
Tax and customs board deputy director general Egon Veermäe said that the problems of the fuel sector are systematic and serious.
“The uncollected VAT in one sector is over 700 million kroons (around 44.7 million EUR), thus this shows that there is something wrong in that sector,” he said, adding that the system of financial guarantees should regulate that market considerably and bring more honest competition. If the parliament approves of the corresponding law amendment, fuel companies will be demanded a guarantee to trade.
Naturally fuel sellers are not the only VAT fraudsters, tax officials have a lot of work with scrap metal and real estate businessmen. Customs are fighting illegal cigarettes business which is thought to amount to 19% of cigarettes market.