The European Commission should remain careful to not have a disproportionate legislative response that risked harming States' sovereignty in matters of taxation, Former Prime MInister Alfred Sant said.

Dr Sant, an MEP, was explaining his vote in favour of a motion on the EC’s new proposals to combat fraud at the European Parliament.

He said that careful attention should be paid to any arising complications that could burden small and medium enteprises, especially micro enterprises; as well as to the implications for commerce in the digital market.

Every year,  EU member states lost more than €151 billion in tax revenue due to VAT fraud, including €50 billion through the so-called ‘carousel fraud’ on cross-border operations.

“I voted in favour of this proposal because it seeks to protect national tax revenues. In a way, it does this because it considers that national tax officers should and would protect the tax revenues of other States as if they were due to their own state.

“EU measures dealing with administrative cooperation between member states in the field of VAT have been in place for more than a decade now. The Commission is at present seeking to involve member States in a common enterprise of protection of tax receipts across the EU.

“Such proposal is welcome in a context where the VAT gap is reaching staggering amounts. Everyone is losing from faulty tax collection systems, while illicit activities prosper thanks to the missing VAT dues. Opening national databases and transparency of information will certainly help tackling cross-border fraud schemes” he said.

The motion was passed with 576 votes in favour, 30 against and 32 abstentions.