Measures against VAT fraud

Marie Olsson (S)

Madam Speaker! Organized VAT fraud are crimes where companies have handled value-added tax – VAT – in an incorrect manner by either withholding paid VAT from the state or by deducting VAT that has not been paid in at all.

A common setup is what is called carousel trading, meaning that goods circulate in a chain of companies but where one of the companies, a so-called shell company, does not pay the VAT to the state despite having charged VAT from its customers. This causes billions in losses to the state every year, and here we need to keep in mind that VAT is actually the state's largest source of revenue.

To a large extent, it is about criminal networks that use companies as tools for crime to defraud tax money through false invoices and sham transactions. The result is devastating because the state's revenues are eroded, the criminal economy is strengthened, and serious companies risk being competed out.

The value-added tax frauds are extensive in Sweden and within the EU. The fraudsters cheat the state out of several billion kronor every year, and this must be stopped.

Madam Speaker! When the Swedish Tax Agency raised the alarm during the Social Democratic government, political decisions were quickly put into motion. The Social Democratic government showed decisiveness and introduced countermeasures, which led to over 60 people being convicted of fraud. The measures were taken by the Social Democratic government in 2021. The measures were effective and reduced the fraud.

The report regarding measures against VAT fraud and the government's bill is based on an investigation that the Social Democratic government commissioned in 2022 after it emerged that the fraudsters had found new loopholes to continue their VAT frauds. In May 2024, two years ago, the investigation submitted proposals for measures against the frauds. The government has thus taken a full two years to present this proposal.

Skatteverket has long warned that international networks involved in VAT fraud are active in Sweden and has pleaded for prompt measures from the government. We Social Democrats believe that this could have been expedited significantly more. The government's sluggishness has even meant that Sweden risks a fine from the EU because it has taken so long to take action. While the criminals have acted quickly and ruthlessly, the government has dragged its feet. In the meantime, the criminal networks have continued to develop new and increasingly sophisticated schemes.

Madam Speaker! The European Public Prosecutor's Office, EPPO, confirms that Sweden is being targeted by VAT fraud. The problem with VAT fraud exists in several European countries. It is cross-border and is estimated to cost the EU's member states around 600 billion kronor per year. That is an enormous amount of money. And some of those 600 billion come from VAT fraud in Sweden.

Sweden's incompetence has led to our country becoming a haven for economic crime. It is an incredibly irresponsible management of tax money, which could have been of significantly greater use in healthcare, schools, and elderly care. That is where these funds would have been needed instead.

The European Public Prosecutor's Office, EPPO, struck against a large organization in Europe suspected of having earned over 5 billion euros – which corresponds to approximately 55 billion Swedish kronor – through similar VAT frauds that are currently occurring in Sweden. In that case, it concerns Italy, Croatia, Bulgaria, and Spain. A total of 200 people and 400 companies are being investigated. It has been shown that there are clear links to known mafia clans. This leads to the conclusion that even the gangs that control crime in Sweden earn money from the VAT frauds in our country. This makes it even more urgent to stop these frauds.

Just as my colleague Mathias Tegnér pointed out in the previous debate, these new figures from the ESO report show that the criminal economy turns over over a staggering 350 billion kronor every year. And they assess that they have underestimated the figure, which means it could involve even more money. Of the 350 billion, it is assessed that 40 billion come from criminal transactions where the VAT frauds are included.

In the ESO report, it is estimated that the VAT fraud involves larger amounts than the investigation that prompted this committee report shows. These are large amounts, and it should be beyond all doubt that the efforts against VAT fraud must be further strengthened, even after this committee report.

The result of the lack of measures is devastating. State expenditures through the payment of false value-added tax feed the criminal economy and thus gang crime. It is money that finances weapons, drugs, violence, and new recruitment to criminal networks. Ultimately, it is also about the legitimacy of our social contract. Every tax krona shall be used effectively and shall not feed crime. To protect that is a central priority for us Social Democrats.

Madam Speaker! In order to tackle these VAT frauds, the Swedish Tax Agency needs to increase the number of audits. This is also raised in the investigation behind the report. All investigations that have been conducted linked to audits from the Swedish Tax Agency raise the need for more audits. We Social Democrats increased the Swedish Tax Agency's budget in our budget proposal precisely so that they can increase the number of audits. The Government has unfortunately not prioritized tackling this type of crime. If they had done so, they would have allocated more money to the Swedish Tax Agency for audit activities.

When it comes to economic crime, there is unfortunately a lack of determination and speed from the government. If we are to seriously turn off the money tap to the gangs, rules and requirements must be tightened, and the leaks from our common welfare system must be stopped. Powerful measures against VAT fraud are part of that work.

The welfare fraud is just one of several ways that finance organized crime. Therefore, more measures are required. We Social Democrats want to introduce a Swedish mafia legislation to target the gang leaders and tighten the penalties for serious economic crime. We have previously demanded that the government present a roadmap to stop the flow of money to the gangs. The VAT frauds belong to that flow.

Through a mafia law, we could also hold everyone who signs agreements and contracts with criminal organizations and their companies accountable for complicity in the frauds. In short, we would be able to reach significantly more people who in different ways contribute to the system-threatening organized crime receiving money from our common tax money to finance their operations and their luxurious lives.

Madam Speaker! For us Social Democrats, it is important that the work against the VAT fraud does not stop at this committee report. Continued active work is needed in Sweden and together in the EU to choke off all opportunities to continue with these frauds.

In short: The government must stop letting criminals live luxury lives on our common tax money, and the state must regain control. Every day of political passivity is a victory for organized crime and a loss for Swedish society.

We Social Democrats are far from satisfied with the government's work against VAT fraud, which we also describe in our special statement. We do, however, see that the report SkU22 Measures against value-added tax fraud is a step on the way towards reducing value-added tax fraud. We stand behind the proposal in the report.

(Applause)

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Jimmy Ståhl (SD)

Madam Speaker! Today we are debating the Committee on Taxation's report SkU22 on measures against VAT fraud.

The value-added tax is one of the state's most important sources of income. It finances our collective welfare – school, healthcare, elderly care, and the justice system. When VAT fraud is allowed to spread, it undermines not only the state finances but also the trust in the tax system and for those who do the right thing.

Madam Speaker! VAT fraud is often cross-border, organized, and advanced. It hits particularly hard against serious companies that are competed out by actors who cheat and systematically evade paying tax. Combating this crime is therefore both a matter of justice, a matter of entrepreneurship, and a matter of order and decency in society.

The Government has presented proposals aimed at strengthening the state's ability to prevent, detect, and combat VAT fraud. I can state that all parties in the Committee on Taxation support the Government's direction in the report.

Madam Speaker! The Government's proposal aims to close known vulnerabilities in the cash system. It is about improving control possibilities, strengthening information exchange, and ensuring that the authorities have appropriate tools to act quickly and effectively when irregularities are detected.

A central starting point for the government has been that the measures must be accurate. Serious companies shall not be burdened with unnecessary administration. At the same time, criminal actors shall find it significantly harder to exploit the system. It is a balance that is crucial for both the business sector's competitiveness and the tax system's legitimacy.

Madam Speaker! We know that VAT fraud is often part of a broader criminal scheme. The proceeds can be passed on to other serious crimes. Therefore, these measures are also part of the government's broader offensive against economic crime and criminal networks.

The Government is working purposefully to strengthen the ability of the Swedish Tax Agency, the Swedish Customs Service, and other relevant authorities to cooperate, both nationally and internationally. In an increasingly globalized economy, international cooperation is necessary to tackle crime that does not stop at national borders.

Madam Speaker! It is also important to emphasize that the fight against VAT fraud is not concluded with this report. The frauds change and the methods evolve. Therefore, regulations and control systems must also be developed in step with the changing world. The Government follows this development closely and does not rule out further measures if they are needed. The Committee on Taxation's report confirms the importance of a robust and fair VAT system where those who act correctly are not disadvantaged and those who cheat are met with effective and proportionate measures.

Madam Speaker! The government's ambition is clear: to ensure that every tax krona that is to be paid in is also paid in. That is how we safeguard the welfare, strengthen the rule of law, and create good conditions for entrepreneurship and growth.

With this, Madam Speaker, I move for approval of the Committee on Taxation's proposal.

(Applause)

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Marie Nicholson (M)

Madam Speaker! Organized crime is complex. It often consists of chains of companies. Straw men stand as owners on paper, while the real owners hide somewhere behind them. Money is moved further on the same day it is paid out, often in several stages and out of the country and sometimes via systems where transparency is lacking. That is how crimes are committed today, and therefore the systems must function differently.

But here we stand today.

Incorrect payments are being caught. What previously appeared to be an individual application is now placed in a larger context. When the same name appears in several companies, when the same accounts recur, and when patterns are repeated, questions are now raised. Schemes that could previously continue for a long time are now detected and stopped.

Money flows face greater resistance. It is harder to move large amounts of cash out of the country. Controls are more frequent. Flows outside the banking system are increasingly scrutinized. Systems such as hawala face a completely different pressure. This results in more illegal transactions being detected and stopped.

Companies are still used in crime, but the space has shrunk. It is harder to register companies with unclear structures, harder to use straw men without raising questions, and harder to lean on companies that have been built up for fraud. More controls occur early on. More setups are interrupted before they grow.

The same development is seen when it comes to assets. A register of condominiums has now been decided. It makes ownership visible. It will become harder to hide assets and to use housing for fraud.

The profits from telephone fraud have more than halved in two years. This means that fewer people are being deceived, but also that the crimes are no longer as profitable.

These are several changes that now reinforce each other. Layouts are detected earlier. Money is stopped earlier. The space for anonymity decreases. This is where we stand today, and it is from here that we take the next step.

Madam Speaker! The common and harmonized value-added tax within the EU is fundamentally a strength. It makes it possible to trade across borders. It simplifies export and import. It supports the internal market. But it also poses a challenge. When trade moves quickly between countries and taxation occurs in several stages, opportunities arise to exploit the system. That is precisely what we see in value-added tax fraud.

In the preparatory works, it is described how trade is exploited through chains of companies and shell companies. Goods and services are moved between actors in several countries. In one link, VAT is claimed back without it having been paid in another link. These are setups that exploit the fact that control comes too late. Therefore, the legislation targets precisely these moments.

Already at the time of registration, there will now be an opportunity to review information and assess whether the activity is serious. Authorities can say no earlier. Companies that do not meet the requirements do not need to be let in. They can also be de-registered. It is also possible to act before money is paid out. If there is a clear risk, payments can even be stopped, instead of trying to get back money that has already disappeared. The possibility to handle registrations in the EU is also strengthened. This makes it harder to use the same setup in several countries.

The measures are targeted and are taken when the risks are concrete. Decisions must be able to be reviewed and shall not go further than necessary. This naturally means that serious companies can continue to operate under stable and predictable conditions, while the space for unserious actors is reduced.

At its core, this is about trust. When the rules work, trust is strengthened that the system is fair. The legislation does not change the fundamentals of the value-added tax, but it strengthens the parts that are vulnerable today. It makes the system more robust and better adapted to how crime actually looks.

Madam Speaker! It matters what we do in the fight against organized crime. New tools and measures are making a difference. We are on the right track, but we are far from finished. We will not slow down the pace.

I vote in favor of the committee's proposal for a decision.

(Applause)

The deliberation was hereby concluded.

(Decisions were made under § 18.)

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