Belgium failing to recover corporate tax debt, says report

Belgium's Court of Auditors has published a report critical of the finance ministry's ability to combat tax fraud in business sectors were it is most rife, notably the construction industry.

In six years, tax authorities have recovered less than €200,000 from a debt of nearly €195 million, Belgium's federal minister for the fight against tax evasion, Johan Van Overtveldt, said in an answer to a parliamentary question.

Since 2010, companies that win public contracts and then sub-contract part of the work to another firm have a liability to pay VAT or social charges if the contractor goes bust.

Green MP Georges Gilkinet said: "It beggars belief that the federal government must wait for a report by the Court of Auditors to realise that the principle has only been used 20 times since its introduction." The party said in a statement that the state's tax collection efforts were "totally ineffective".

The report by the Court of Auditors pointed to a number of blunders in the implementation of the mechanism, which was supposed to combat the practice of companies taking on public contracts and then disappearing, according to RTL.

Van Overtveldt said part of the problem was a "lack of access to relevant information" because, for the tax collection to be effective, "information is needed from several databases, without any link between them".

He said work was under way to "move towards more effective checks by unifying the work process".