MIND THE GAP
A WATERSHED MOMENT ?
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MIND THE GAP
The main motivation for governments in Latin America ( and Italy ) has been stopping VAT leakages due to fraud and the existence of inadequate tax collection systems . Establishing real-time or near real-time invoicing controls as opposed to the post-audit model which currently dominates Europe means the tax administration can get involved at a much earlier stage and reduce tax fraud , evasion and avoidance .
In Europe in 2016 , the VAT gap was 12 % of what should be collected and amounted to € 147bn . Italy had the largest VAT gap among the EU Member States . In 2015 , the difference between the expected VAT revenue and the amount actually collected in Italy was an incredible € 35bn . It ’ s not surprising therefore that governments have decided to take action .
A WATERSHED MOMENT ?
As well as Latin America , real-time clearance models have already been implemented in Russia and parts of Asia and Italy ’ s decision to join the movement will no doubt lead others in
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