Belgium Turns the Table on VAT Carousel Fraud with Advanced Analytics
In a significant breakthrough, Belgium’s Special Tax Inspectorate (ISI) has effectively eradicated Value-Added Tax (VAT) carousel fraud using innovative advanced analytics. The hybrid detection model developed by SAS, a leading provider of data analytics software, has enabled the tax authority to identify and prosecute fraudulent transactions with unprecedented success.
The Challenge
Carousel fraud is a complex and sophisticated form of tax evasion that can take many forms. It’s a cat-and-mouse game between criminals and tax authorities, but our advanced analytics approach has given us the upper hand.
The Solution
The hybrid detection model combines:
- Social network analysis
- Data mining
- Business intelligence
to identify patterns and anomalies in large datasets. This allows tax authorities to quickly pinpoint companies at risk of carousel fraud and take swift action to prevent further losses.
Results
Belgium’s success is impressive:
- In 2002, VAT losses due to carousel fraud stood at €1.1 billion
- By 2012, this had been reduced to a mere €18.5 million – a staggering 98% decrease
International Implications
The situation varies greatly from one country to another. European taxpayers lose billions of euros every year due to VAT carousel fraud. A common analysis is the ideal solution for greater efficiency, and we believe that a centralized approach could make it possible for governments to save enormous amounts.
The Future
In an era of increasing globalization and digitalization, the fight against tax evasion requires innovative solutions. Belgium’s success with the hybrid detection model serves as a beacon of hope for other countries struggling to combat VAT carousel fraud.
Conclusion
It’s not just about saving money; it’s about ensuring that our tax systems are fair and transparent. We can’t afford to let criminals get away with stealing billions from honest taxpayers.
Yannic Hulot, Director of ISI