An additional DKK 3.8 bn a year for welfare spending or tax cuts. This is the amount that the politicians can dispose of if they choose to invest in a better and more intelligent tax control of Danish companies – with particular focus on the ones that deliberately try to bend the rules. These are the findings in a new report from the analysis institute, Højbjerre Brauer Schultz.
The tax gap is the difference between the taxes payable and the taxes that are actually paid. According to the Danish Tax and Customs Administration (SKAT), there is an annual tax gap of DKK 23 bn every year. However, this amount could, according to the report, be reduced by as much as DKK 4.6 bn every year in order to bridge the tax gap to reach the goal of keeping it at a maximum of 2 per cent.
1,000 more employees for the Tax Administration
The precondition for reducing the tax gap and obtaining an extra tax revenue of DKK 4.6 bn is to invest heavily in a better and more intelligent tax control. Tax control must therefore be upgraded with another 1,000 employees in order to bring home the extra revenue. Once the costs for staff and administration are deducted from the estimated revenue of DKK 4.6 bn, 3.8 bn will remain for the politicians to dispose of.
The findings of the report were presented to the politicians during a parliamentary hearing. During this hearing, solutions to bridging the tax gap were discussed as well as new opportunities for catering to law-abiding companies and for targeting those that deliberately try to avoid paying taxes.
LO-President Lizette Risgaard had the following comments at the hearing: – The figures very clearly indicate that it is sensible to prioritize tax control by hiring more tax employees. I therefore hope that there will be wide support for prioritizing more tax control among unions, industry and, of course, a majority in Parliament.
– Whether or not the latitude is used for tax cuts or welfare spending, I think we can agree that everyone must contribute to society by paying the taxes that are required by law, Lizette Risgaard concludes.