It is estimated that this type of fraud costs EU governments a staggering euro 4bn a year in lost revenues.
The new computer system, operational by 2008 with running costs of euro 4m a year, will connect 80,000 companies and individuals.
It is meant to prevent criminals evading excise duties through selling export-bound alcohol and cigarettes, by providing customs authorities with real-time information on consignments of alcohol and tobacco, enabling them to plan inspections in advance.
In addition to running costs, the system will also cost each members state euro 12m to set up. But officials say the overall cost will be less than 5% of tax revenue currently lost by EU governments.
Making Tax Digital will impose significant additional tax compliance costs on small businesses for little or no medium term benefit, tax and small business experts told MPs
MHA MacIntyre Hudson has partnered with cloud accounting software provider Xero ahead of the government’s requirement for digital records
The drive towards a fully digital tax regime is an admirable one, but mandation is simply wrong, according to one of the UK's most senior tax technology practitioners - Paul Aplin
Does Darwin's theory apply to taxation? Colin ponders...