Carte blanche for tax boss
The fight against fictitious invoices is being restructured. The Finance Act 2021 saw the introduction of a new procedure to combat this type of offence (Article 132 of the General Tax Code, CGI). Indeed, as soon as fraud relating to fictitious invoices is involved, the Minister of Finance or the delegated person are no longer required to first seek the opinion of the Tax Offences Commission.
They can automatically refer the matter to the King’s Public Prosecutor for legal action against the fraudsters, without first going through the Tax Offences Commission. The Minister of Finance has just issued a decree granting full powers to Younes Idrissi Kaïtouni, Director General of Taxes, to take legal action and enforce the penal sanctions provided for in Article 192 of the CGI.
This is in line with Article 231, which allows the Minister of Finance or a delegated person to initiate legal proceedings. The Minister of Economy and Finance, Nadia Fettah, has now decided: from now on, it will be the Director General of the Tax Department who will have full powers in this matter. Clearly, it is the Director General of Taxes who will initiate criminal legal proceedings by referring the issue of fictitious invoices to the Public Prosecutor (article 192 of the CGI). The Minister of Finance also anticipated the situation by giving the Director General of Taxes carte blanche to take legal action in the case of other categories of tax offences other than those concerning fictitious invoices (listed in Article 192 of the General Tax Code, CGI). Here again, the choice was between the Minister of Finance and another person to deal with the future Tax Offenses Commission (Commission des infractions fiscales).
As a reminder, the 2021 Finance Law, in view of the scale of the traffic in fictitious invoices, revised the sanction procedure. The aim is to step up the fight against this phenomenon, which is highly detrimental to the treasury and transparent businesses. The principle of invoice fraud is to create companies whose sole activity is to issue fictitious invoices designed to increase the charges of customers who purchase them in order to evade taxes, in return for a fee proportional to the amount of the said invoice, 5%, for example. In 2018, fraud involving fictitious invoices reached some 30 billion dirhams (US$ 3 billion) undeclared by phantom companies, and 5 billion dirhams (US$ 500 million) of VAT wrongfully reclaimed. These companies are not in good standing with the tax authorities, either in terms of reporting of payment obligations.
Hassan EL ARIF
