The leaking VAT system must be quickly and efficiently fixed, said MEP Julia Pitera, Rapporteur on the 2015 report on the 'Protection of the EU's financial interests – fight against fraud' that was voted today at the European Parliament.

In 2014, €159.5 billion of expected VAT revenues were not collected. This is almost the amount of the whole EU budget. Nearly one third of this sum, €50 billion, disappeared in carousel frauds – the type of fraud in which VAT and goods are passed around between companies and jurisdictions.

“It is clear that the problems related to cross-border VAT fraud need strong, coordinated and speedy measures,” Ms Pitera said.

It is regrettable that the Commission has postponed the publication of its measures to strengthen the capacity of tax administrations

“The Commission must speed up its procedures and come up with solutions in order to avoid the loss of tax revenue in the EU and in the member states. As time is money, it is regrettable that the Commission has postponed the publication of its measures to strengthen the capacity of tax administrations.”

“The implementation of short-term measures to tackle losses on VAT should also not delay the Commission’s proposal for a definitive VAT system as provided for in its action plan,” she highlighted.

The 'PIF' report on the Protection of Financial Interests is an annual report which assesses if EU money has been well managed, for both expenditure and revenue. In her report Ms Pitera also calls on the Commission to continue its effort in simplifying EU legislation, in order to reduce the administrative burden and cost-related spending, to encourage beneficiaries by easier access to funds and to better recognise fraudulent attempts from simple irregularities.