Tax fraud grows by 9 percent

THE amount of tax fraud discovered in the Balearics came to 163 million euros in 2005, some 9.6 percent more than in 2004.
This was discovered through 8'133 inspections for suspected tax evasion on a total of 4'204 tax payers, of whom 34 percent (1'045) were from the real estate sector, one of the areas where a large number of tax fraud inspections were carried out. During a press conference, the central Tax Office's delegate to the Balearics, Raul Burillo, said that the start of the Prevention of Tax Fraud Plan in January 2005 had allowed them to improve the effectiveness of the inspections. This, in turn, had contributed to an increase in the net recovery of taxes (gross recovery minus expenses), which had increased by some 14.8 in comparison with 2004, the highest increase since 1989, recovering 2'392 million euros. Burillo emphasised that the amount recovered in 2005 was an increase of more than 500 percent on the year 2002.
As he explained, 2005 was a year of “tax stability”, during which the tax burden had not increased due to the “high increase” in the payment of taxes owed. He said that this was due, in part, to the “good behaviour” of tax-payers towards the Treasury, as well as the “improved levels of inspection” made under the Prevention of Tax Fraud Plan. He highlighted that the “most important” inspections were made in the area of illegal networks of money launderers (190 inspections), coming from Eastern Europe and from tax havens, who choose the islands to launder their money through the purchase of goods and property, such as plots of land, estates, flats or hotels. The “undeniable attraction” of the Balearics as a land with a lot of building going on, “without doubt” attracts organised gangs “much more than other places in Spain” said Burillo, who added that another of the areas where they had increased their tax fraud inspections was in the purchase and registration of top of the range vehicles. The Treasury, in collaboration with the Balearic Traffic Department, detected a total of 59 fraudulent registrations last year, whose sale value was much less than it should have been. The amount of fraud in this area is not insignificant as, according to Burillo, the Balearics was, in 2005, the third autonomous region to have the highest average amount of registrations of luxury vehicles in Spain. The housing sector was another of the areas subject to a high number of inspections (1'045) with “surprising” results in relation to previous years. According to Burillo, the number of people declaring profits on property rose by 10 percent in 2005, with 3'641 new tax payers, which resulted in a total of more than 400 million euros of declared property profit. “This increase in people declaring property which emerged in 2005, and which until then had remained, by some means, hidden, was clearly due to the new exhaustive control measures set out in the Prevention of Tax Fraud Plan”, said Burillo. The Tax Office also, in 2005, took part in the fight against drug trafficking via the Customs and Excise Service, which seized a total of 3'914 kilos of hashish. Finally, Burillo said that during 2005 there was a total of 30 proceedings against 28 tax payers (companies or private people) accused of “evading taxes”. Also a total of 41 preventative measures had been imposed to “effectively guarantee the payment of tax debts”.