Financial Minister Reorganizes Department - Geue criticizes plans to cut bureaucracy using traffic lights
Mecklenburg-Vorpommern's Finance Minister Heiko Geue (SPD) raises concerns over the federal government's plans to decrease bureaucracy, arguing that they compromise the struggle against tax evasion. "Fighting for tax fairness and winning the battle against tax evasion are core values in sound financial policy. Shortening the retention periods is in direct conflict with these principles and past federal financial practices. I oppose this proposal," Geue stated in Schwerin. Regretfully, a consensus among state finance ministers in the Bundesrat could not be achieved, and the draft law was forwarded to the Bundestag without the necessary amendments.
The German government intends to implement the Fourth Bureaucracy Relief Act, which, among other measures, seeks to reduce the retention period for commercial and tax-related records for accounting documents from ten to eight years. The government projects these changes will bring annual savings of around 944 million euros for the economy. However, Geue asserts that such changes would come at a cost of 200 million euros for the state. The inability to pursue tax evasion for as long as previously could make it harder to prove cases when the necessary accounting records are no longer available after eight years. He also believes the reduction in bureaucracy will be negligible. As digitalization advances, more records will be stored electronically. At the same time, companies will need to follow three different retention periods: six years for business letters, eight years for accounting documents, and ten years for books and annual financial statements. "While the draft law talks about reducing bureaucracy, it, in fact, creates more of it," Geue remarks.
The Mecklenburg-Vorpommern Finance Ministry reports that they have launched around 1,000 criminal investigations every year due to suspected tax violations. Additionally, tax investigators scrutinize approximately 200 to 300 cases annually. The total amount of evaded taxes reached 14.6 million euros in 2023 within the last five years, according to the Ministry, but no information is provided on the durations of the probes.
Read also:
- Tough return to normality in snow and ice
- Fewer unauthorized entries: Domino effect through controls
- Trial against BND employee from mid-December
- Xhaka leads Leverkusen to triumph in cup tournament, scoring two goals.
- In opposition to the Federal Council's plans to decrease bureaucracy, Heiko Geue, the Finance Minister of Mecklenburg-Western Pomerania and a member of the SPD, voiced concerns about its impact on tax evasion prosecutions.
- Geue argued that reducing the retention period for commercial and tax-related records would conflict with the principles of financial fairness and tax evasion combat, emphasized in previous federal financial practices.
- The German government, aiming to save around 944 million euros annually with the Fourth Bureaucracy Relief Act, intends to shorten the retention period for accounting documents from ten to eight years.
- However, Geue forecasts that such changes in retention periods would cost the state approximately 200 million euros due to the inability to pursue tax evasion cases beyond eight years.
- The Finance Ministry of Mecklenburg-Western Pomerania has initiated roughly 1,000 criminal investigations each year due to suspected tax violations, with tax investigators scrutinizing around 200 to 300 cases annually.
- Despite plans to reduce bureaucracy, Geue contends that implementing varying retention periods for different types of records will create more complexities, rather than streamlining processes as claimed in the draft law.
Source: www.stern.de
