Concept of Economic Crime and Its Scope as Seen From the Perspective of the Local Tax Authority (From Ekonomisk Brottslighet, P 132-154, 1979, Leif Johansson and Dan Magnusson, eds. - See NCJ-79655)

• NCJ Number: 79661
• Author(s): L Unger
• Date Published: 1979
• Length: 23 pages
• Sale Source: Brottsforebyggande Radet
• Country: Sweden
• Note: *This document is currently unavailable from NCJRS.

Annotation

A local tax authority discusses the kinds of tax fraud and evasion that occur commonly in Sweden and in the Stockholm commune in particular. Local authorities' difficulty in interpreting and enforcing laws set by national legislators with little understanding of the practical implications of their laws is noted.

Abstract

Legislation and regulations passed by lawmakers tend to be idealistic and highly moralistic. In the view of local tax authorities, however, many of the tax laws are difficult to interpret, require great amounts of recordkeeping, and are confusing so that even well-meaning citizens might be offending unintentionally. Most important, detection of wrongdoing and enforcement of the laws often requires resources that the local authorities simply do not have. As a result, since the social welfare system depends upon collection of these taxes, the Government is losing millions of crowns annually and the whole of society suffers. Examples of laws that are difficult to enforce include the requirement that all persons changing addresses register the move with the local tax authorities. This register generates the residents' insurance and subsidies and thus must be accurate if the amount collected in taxes is going to cover the amount dispersed to residents. However, persons who have left the country owing taxes are not likely to register on their return, and false registrations can be made by persons living in a commune with higher taxes. Another problem is the law requiring that new businesses register, pay a preliminary tax, and put themselves on the tax records so that the Government can collect employees' withholding, employers contributions, etc. Since the local authorities do not have the resources to monitor companies' compliance with the tax laws on a continuing basis, many companies left their tax debts accumulate while they take in profits. They then declare bankruptcy when the tax debts reach a sufficient level. The law allowing small low-profit business and nonprofit organizations immunity from certain taxes has also caused a problem with fraudulent declaration. The greatest tax losses are probably realized in larger urban areas such as Stockholm, where the manpower and resources to give to detection and enforcement are stretched out over a larger number of people. Appendixes contain estimates of losses to the Government for a hypothetical case of tax fraud. Footnotes are provided.