Saudi Arabia: Three arrested for VAT fraud
Saudi, two Syrians charged with electronic sales suppression, over-reporting deductions
Abu Dhabi: A Saudi man and two Syrian residents have been arrested on charges of facilitating VAT taxpayers’ evasion and fraud, through intentional misrepresentation of tax obligations, police said.
Major Khaled Al Kreidis, assistant spokesman for Riyadh Police, said the trio, in their 30s and 40s, solicited the value added tax (VAT) fraud and evasion through social media, against payments of up to 500,000 riyals per case.
“The men were busted after they carried out more than 340 suspicious operations in less than two months, which enabled them to alter the accounts of scores of businesses. Some 19,394 riyals and four mobile phones that included data and documents for the beneficiaries of the tax fraud were seized,” Major Al Kreidis said.
The accused were moved to the Public Prosecution pending trial, police said.
The spokesperson for the General Authority for Zakat and Income, Hammoud Al Harbi, confirmed that state of the art technology is used to detect tax evasion and fraud and bring offenders to justice.
Al Harbi urged members of the public to report any tax evasion or fraud, saying that whistleblowers are rewarded with 2.5 per cent of the revenues and fines collected, but not less than 1,000 riyals and a maximum of 1 million riyals.
Tax evasion
“While most taxpayers comply with their tax obligations, some are determined not to, but we are further determined to bust them,” Al Harbi said.
The official added not only is this against the law and defrauds the government of revenue, but it also creates an un-level playing field for compliant taxpayers.
Many tax authorities around the world are seeing particular types of tax evasion: underreporting of income through electronic sales suppression and over-reporting of deductions through false invoicing. Tax evasion and fraud can be further facilitated by the cash economy and the sharing (or online) economy.
However, cost effective technology solutions are already available for tax authorities to implement, and which prevent and detect these types of tax evasion and tax fraud.