PROBLEMS OF TAX EVASION IN VALUE ADDED TAXES

Abstract

This article focused on the problems of tax evasion in value added taxes compared with the tax laws of the United Kingdom, in order to find appropriate legal and administrative solutions in all kinds of tax evasion in value added taxes cases. The analysis report showed the problems of tax evasion in value added taxes in three practices which are 1) Failure to register in the value added taxes system, 2) Value added taxes collected but not remitted to the tax authority and 3) Selling goods and services with multiple transactions.  In the United Kingdom, the solutions applied for solving these problems are 1. To clearly and precisely determine status of traders in value added taxes system, 2. To use the system forcing the buyer, as a duty, to remit the VAT instead of the seller or "Reverse Charging", and 3. To determine Joint and Several Liability. According to the study, the tax evasion in value added taxes cases can be reduced by following those guidelines. Therefore, it is necessary for Thailand to clearly define and add duty to those who is responsible for tax remittance including the online commercial business. Buyers are responsible to pay tax, instead of sellers in some kinds of business that are at risk of value added tax evasion. Moreover, adding the penalty of fine rate under the Revenue Code, Section 89 is also important. And the persons in any part of the same production line or a joint sale or purchase transaction should be aware of and responsible for the penalty of tax evasion in value added taxes together.