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Regional workshop on VAT fraud and Customs Commercial Fraud

Jul 26, 2017

The OCO Secretariat in partnership with PFTAC and PITTA will be conducting a Regional workshop on VAT fraud and Customs Commercial Fraud, from the 7th to the 11th of August at the Tanoa International Hotel in Nadi.

Anecdotal evidence suggests that VAT fraud is on the increase and if not addressed could potentially result in the erosion of significant tax revenues. There are diverse types of VAT fraud that can be identified ranging from inflated refund claims, underreported sales, fictitious traders, to a more complex type of fraud which has international dimensions e.g. VAT Carousel or missing trader fraud. The latter is regarded as a major cause of lost revenues and poses challenges for small and developing tax administrations when responding to complex fraud schemes especially due to fraudsters becoming more skilful in their development. To effectively tackle this problem, Pacific Island Countries are working towards streamlining and modifying internal processes and developing expertize to react swiftly and effectively in dealing with complex VAT fraud cases.

In addition to highlighting the benefits of enhancing cooperation between Customs and Revenue Administration, the workshop will emphasize how customs and tax collections can be improved through deeper risk analysis including the exchange of information.

The Australian Tax Office, New Zealand Police, Reserve Bank of Fiji, AUSTRAC and the Asia Pacific Group on Money Laundering (APG), and Australian Federal Police, New Zealand Customs, will also participate in this workshop and provide insights into their experiences relating to VAT fraud and money laundering, and how Pacific Island Countries can leverage and learn from their experience.

The Workshop will be targeted at PCA Auditors and investigators In the 8 Revenue administrations who apply Border VAT. This workshop is designed for middle managers and auditors/customs officials who are involved in day-to-day compliance work and who are investigators with some experience in this area. Participants are expected to play an active part in the workshop and Members who have uncovered VAT fraud will share their experiences, which will provide learning an opportunity for the wider group with a view to encouraging trade liberalization and a greater integration into the regional economy, Pacific Island countries have concluded a number of international trade agreements such as Pacific Island Countries Trade Agreement (PICTA), PACER Plus, the Economic Partnership Agreement (EPA) with the European Union, and the Melanesian Spearhead Group.

Whilst these are notably positive developments, they have also increased the potential risk of customs offences, tax evasion, and tax avoidance, and have put Revenue Administrations under greater pressure to improve risk management capability whilst at the same time streamlining trade facilitation efforts.

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