The plan, which expands collaboration between public agencies responsible for fraud control to improve their effectiveness, includes 60 measures aimed at prevention, coordinating the collection of information, improving the effectiveness of fraud control and cooperating in collection actions. Its aim is to respond to changes in the types of fraud resulting from the economic crisis, especially the informal economy and undeclared work, and will provide revenue equivalent to 0.1% of GDP, as well as contributing to the consolidation of public finances.

March 5, 2010 .The Second Vice President of the Government and Minister of Economy and Finance, Elena Salgado, today presented to the Council of Ministers the Comprehensive Plan for the Prevention and Correction of Tax, Labor and Social Security Fraud, which has been prepared jointly by the Tax Agency, the Social Security Treasury and the Labor Inspectorate, and whose objective is to respond to the changes that the typology of fraud has experienced as a consequence of the new economic context, especially in relation to the irregular economy and undeclared work.

 

The Plan approved today, which will come into effect immediately, presents 60 measures structured around four lines of action:  prevention and promotion of voluntary compliance; the improvement of information collection systems through the shared use of the databases of the three public bodies responsible for fraud control – the Tax Agency, the General Treasury of Social Security and the Labour and Social Security Inspection; the implementation of joint control actions, which will be added to those already carried out by each agency; and the design of coordinated collection actions to improve their effectiveness.

 

The new plan complements the specific initiatives that the competent bodies have been developing in recent years in the areas of taxation, labour and social security, and which will continue in the following years. Initiatives such as the Tax Fraud Prevention Plan, which have enabled the Tax Agency to collect more than 35.5 billion euros in the last five years, through the systematic pursuit of the most complex and sophisticated fraud mechanisms; or such as the Fraud Observatories created by the General Treasury of Social Security and the Labour Inspectorate, which have contributed to refining the risk profiles of the different sectors of activity and significantly improving the results of the fight against fraud in the social and labour field.

 

With the package of measures approved today, the Government hopes to increase revenues from the fight against fraud to an amount equivalent to 0.1% of GDP in 2013, thereby contributing to the scheme for consolidating public finances included in the Update of the Stability and Growth Plan.

 

INFORMATION COLLECTION

 

The Comprehensive Plan for the Prevention and Correction of Tax, Labour and Social Security Fraud has been developed jointly to promote cooperation in actions against forms of fraud arising from the current economic context. To achieve this, the use of information is essential.

 

Instruments are established for the shared use of information available at the Tax Agency, the General Treasury of Social Security and the Labour Inspectorate, and the creation of joint databases is planned to increase the efficiency of the use of this information. Furthermore, international cooperation will be strengthened through the signing of new double taxation agreements, participation in European information exchange programmes and the promotion of a European network to combat fraud.

 

Another objective of the plan is to involve social and economic stakeholders in the fight against fraud. In this regard, agreements will be put forward at national, regional and local levels to ensure that they become actively involved in the fight against undeclared work; and the so-called agreements of understanding and exchange of information with sectoral organisations will be extended to prevent fraud in those sectors with a higher risk of fraud.  

 

CONTROL ACTIONS

 

Joint control actions will focus on those risk areas identified as being more prone to concealment of activity and undeclared work. For example, inspections will be carried out on apparently insolvent companies where activity is detected or traces of signs of irregular trade and smuggling will be sought.

To increase their effectiveness, these actions will be based on coordinated planning based on the information available in the records of the three public bodies, which will allow for joint and even simultaneous control actions, in cases where it is considered most appropriate. In light of the results of these actions, the regulatory changes that are necessary to facilitate the automatic incorporation of the facts reflected in a control action by a given body into the checks that may be carried out by others will be studied.

 

FUND COLLECTION ACTIONS

 

The plan includes the creation of a Joint Commission between the Tax Agency, Social Security and the Labour Inspectorate to coordinate collection actions in cases of special magnitude and bankruptcy proceedings. Joint criteria will be established in cases of concurrent seizure and collection.

 

Territorial coordination councils between the Tax Agency and Social Security will also be established.

 

PROMOTING VOLUNTARY COMPLIANCE

 

Compliance will be encouraged by reducing administrative burdens through the creation of a joint certificate of compliance with tax and social security obligations. And civic awareness campaigns will be carried out to ensure compliance with the various obligations.