Federal Finance Minister Lars Klingbeil and Federal Justice Minister Stefanie Hubig (both SPD) want to crack down harder on tax evasion going forward. The two SPD politicians presented an action plan against tax and financial crime on Thursday, which provides, among other things, for abolishing exemption from punishment for voluntary self-disclosure in its current form. "Criminals should no longer be able to buy their way out so easily," said Klingbeil at the joint presentation of the plan in Berlin.
"Tax crime is not a crime of ordinary people. The cashier at the checkout cannot simply shift his wage tax to a shell company, and the self-employed physiotherapist never earns enough income for illegal financial dealings," said Hubig. "And that is precisely why it is so fatal when large-scale tax crime goes unpunished without noticeable consequences. Tax crime undermines trust that the rules apply to everyone in this country." Every euro evaded, she said, is missing from schools, the police, the railway, and the judiciary.
According to the plans, tax evasion is to be reinstated as a criminal offense classified as a felony, in order to "punish particularly severe cases more harshly." This would mean a minimum sentence of one year in prison. "We are thereby placing greater obligation on public prosecutors. They must investigate in these proceedings," said Hubig. "They cannot discontinue proceedings on discretionary grounds."
For organized tax crime, the sentencing framework is to be raised to up to 15 years under the action plan, "in order to confront cases of gang-based tax evasion, for example, with the necessary severity." As a deterrent, Klingbeil and Hubig also want to expand "the systematic acquisition of data." Until now, the states have been responsible for this, but the action plan sends the signal that the federal government also feels "responsible" and intends to pursue data acquisition itself, said Klingbeil.
For the benefit of "all honest taxpayers," the SPD ministers want to simplify tax law together with the states. This is to include, for example, flat-rate allowances to make tax returns easier.
In addition, Klingbeil and Hubig want to expand the "instruments" used to seize "dubiously acquired assets." "The Porsche and the Rolex will then be gone right away, and that will really hurt the perpetrators," said Klingbeil. As a further deterrent, a public register is to be introduced for companies "that have been sanctioned for serious tax offenses."
To effectively combat financial crime, customs authorities are also to be strengthened. A center against tax and financial crime is to be established there, bringing together tax investigators from the states along with investigators and analysts from federal authorities. Klingbeil said 1,500 additional positions would be created at customs this year, with some of these jobs also going to the customs unit for combating illicit employment, Financial Control of Undeclared Work (FKS).
The action plan also provides for the introduction of a mandatory cash register requirement, which the CDU/CSU and SPD had already agreed on in the coalition agreement "for businesses with annual revenue of more than 100,000 euros." The retention periods for accounting documents are also to be extended to 15 years.
An extension of such retention periods had been called for, among others, by the organization Finanzwende. Finanzwende board member Anne Brorhilker stated that the organization welcomed "a wide range of sensible measures" in the action plan. This, she said, "suggests that the federal government is finally taking the fight against tax crime seriously and is pursuing it with the necessary ambition." Now, she said, actions must follow "as promptly as possible in the legislative implementation."
Left Party parliamentary group leader Sören Pellmann stated that Klingbeil must now deliver concrete legislative initiatives. He recommended, however, that Klingbeil "talk to the chancellor" or CDU/CSU parliamentary group leader Jens Spahn sometime, as they tend to have other priorities: "I wish for once to see the same toughness shown against recipients of basic income support applied to the prosecution of tax evasion."
The finance minister was unwilling to name a sum that could flow from the action plan's measures, he said he could only speculate, since "we don't even know from scientific analyses how great the damage is that the state suffers." "But we are firmly convinced that it is worth taking up this fight for justice, that it is worth intensifying the fight against those who defraud the state."
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