“Everyone knows”; “Two governments have known and done nothing…”
Tax authorities have been intent on investigating a tax fiddle by fuel import companies for at least the last 10 years – yet it is still going on.
This is the gist of a story doing the rounds today, suggesting the fraud “has damaged the Portuguese State by more than €200 million” in the last four years alone
‘Broken’ by Diário de Notícias, the case centres on companies “illicitly taking advantage of the VAT and ISP (fuel tax) differential between Portugal and Spain, buying fuel on the Spanish market as if it were to operate locally and then selling it in Portugal (where fuel is more expensive), without declaring it and paying the remaining VAT,” António Comprido, secretary-general of the Portuguese Association of Oil Companies (APETRO), told the paper.
It also involves the sale of biodiesel, which, in some cases, does not meet the required composition requirements. In other words, it is not biodiesel, but it is marketed as such, and because biodiesel has a higher price “counterfeiting results in important gains”. Equally, if the targets for biofuels are not met by the operators, “there are also flaws in the inspection”, says the paper, to ensure no importing company is ‘found out’.
“The fraud allows companies to offer more competitive prices on the market, thus distorting the rules of competition, negatively affecting national producers who comply with their tax and environmental obligations”, explain reports.
Says DN, the scam includes “simulating fuel sales to fictitious entities in order to avoid paying VAT”.
“Everyone knows about this, but the truth is that because of legal loopholes, which have been identified for a long time, or because of ENSE’s lack of inspection capacity, these companies are using dilatory maneuvers, by experienced lawyers, and continue to operate in the market,” António Comprido told DN.
Suspicions of irregularities “are not new”, concedes the paper, “but since 2021 they have worsened with the strengthening of environmental requirements and also with the ISP exemption that the government created for “greener” components to be incorporated into biodiesel.
“The first time we flagged problems to the government was in 2014, and since then there have been two more governments and nothing has been done,” laments António Comprido.
In 2018, a working group was set up involving the State Secretariats for Energy and the Environment and the sector’s most representative associations, such as Apetro, APPB and Anecra.
A report came out of the working group, which recommended various measures, such as legal changes to reduce the risk of infringement, harmonization of limits for incorporating biofuels with EU countries, in order to avoid market distortions; streamlining mechanisms for coercive collection in cases of non-compliance with biofuel titles and also for the suspension of licenses.
Six years on and nothing has changed, says Comprido.
Source: Diário de Notícias
