Final Word from Tuesday, April 27, 2004
As companies struggle to figure out their new VAT requirements, they have one small comfort: The finance ministry promises to be as tolerant as possible in enforcing the new rules. Tax advisers say, though, that this is largely an empty promise meant to direct attention away from the holes in the law. The finance ministry has set up two helpful hotlines for addressing VAT questions, but the answers callers receive aren't always definitive and aren't in writing. There's no guarantee that a tax auditor won't have a different opinion. The finance ministry can waive penalties for VAT violations, but it can't forgive any tax or reimburse businesses if they charge a customer 5% and later find out they should have charged 19%. In fact, tax auditors will likely concentrate on such cases, because one of the main reasons for the changes is, after all, to increase VAT revenue. value-added tax