The European Parliament today adopted the 'Casa Report' (penned by Maltese MEP David Casa) on VAT fraud, which recommends the introduction of a Quick Reaction Mechanism that would allow member states to respond rapidly and efficiently to VAT fraud.
The report was carried by 559 votes in favour with 9 votes against and 5 abstentions.
A debate on the report was held in the plenary in Strasbourg prior to the vote. Commissioner Šemeta was present at the debate and welcomed the leading role the Parliament has taken in the fight against VAT fraud. He also expressed his support for the 'Casa Report' and accepted the amendments to the Commission proposal concerning the reporting obligations on VAT fraud. In addition, Commissioner Šemeta stated the Commission will do its best to defend these amendments in the discussions with the Council.
During the debate many MEPs from various member states took the floor and expressed their support for both the Commission's proposal and for the 'Casa Report'. The majority of MEPs present expressed their support for this positive first step in combating VAT fraud. MEPs also emphasised that the Quick Reaction Mechanism, once introduced, will be very efficient and will solve one of the problems in the possibly faulty system at present.
The European Parliament also highlighted the need for the introduction of further initiatives which would create a simpler and more harmonious system of EU coordination in the fight against tax evasion and tax fraud. It was agreed that simplicity is the best solution as it will remove the uncertainty that exists across borders, which currently provide fraudsters with many opportunities.
Combating VAT fraud is one of the priorities of the Irish Presidency. However, member states are still divided on the proposal with a number of member states seeking to block the proposal as they are sceptical about the effect of such a proposal on their national sovereignty. In an attempt to reach an agreement on the issue the Irish Presidency will publish a paper on VAT fraud in the coming weeks.
Despite the reluctance of some member states to support this proposal for a Quick Reaction Mechanism it is important to remember that this is just one small step in the fight against VAT fraud and more tools will be required to efficiently deal with both VAT fraud and tax evasion. The Commission has already begun looking at other possible measures and these were outlined in its Action Plan which was presented in December.
In addition, the Parliament is currently preparing an additional report on the fight against tax fraud and tax evasion. This latter report is expected to support further the Commission's proposal by supporting the further enhancement of Union coordination in this field.