One of Belgium's leading judges Michel Claise believes the Federal Government does not do enough to effectively fight tax evasion, RTBF reports.
Belgium's federal debt, as of December 2022, amounted to just over €470 billion, according to the Debt Agency's calculations.
In order to reduce the debt, the Belgian government is relying on taxes collected from the population, but not only. It is also tackling benefit fraud – undeclared work, non-payment of contributions, undue receipt of benefits – and tax evasion – the failure to declare income, labour and capital in order to avoid paying tax.
With benefit fraud, the government regularly presents new plans. The Vivaldi coalition's efforts have resulted in the recovery of €342 million by 2021. And in January 2023, the Council of Ministers approved an operational plan to combat this type of fraud.
When it comes to tax evasion, the Federal Ministry of Finance estimates the figure to be at €30 billion per year. In parallel, tax avoiding Belgian companies sent €383 billion to tax havens in 2020 (and declared in 2021), which remains legal.
Weaker tax evasion measures
To prevent tax evasion, Belgian Finance Minister Vincent Van Peteghem announced in April 2022 that he would continue the fight by issuing a second action plan, one year after the first one.
With 29 action points, the first plan aimed, among other things, to remove the barriers between the tax authorities, the police and the judiciary, to hire additional investigators, to allow digital payment in all businesses and to modernise cash registers in the hotel and catering industry.
The second plan focuses 23 action points on international fraud and complex fraudulent constructions by intensifying data exchange and transparency. In this way, the government hopes to recover €1 billion per year in additional tax and social security revenue by 2024.
For Michel Claise, the investigating judge in charge of the most important corruption, tax fraud or money laundering cases, this figure is currently impossible to obtain . "We are far from the figure," he says. "The Finance Ministry quotes amounts that are most of the time enrolled and not recovered. This is what we recover from insolvent people."
How to effectively tackle the problem
For him, the policies put in place are far too insufficient to fight tax fraud effectively. "There are two ways to fight tax fraud: either administratively by finance for simple tax evasion, or by justice for organised tax evasion. But the system is lax because of a lack of funding."
Both in the Finance Ministry and in the judicial police there is a severe lack of resources. "We have also complicated the procedures by asking the correctional judge...to substitute the tax judge for tax audits. But correctional judges are not trained in the very complex tax law process."
The government is therefore not completely inactive in the fight against tax evasion, but is also not thrusting its entire weight against it side either. "What we need to do is to strengthen the resources of both the administration and the judiciary. Then we need to work on tax simplification so that we no longer get lost in the rules and the door is no longer open to fraud."
