Online whistleblower service sees record tax fraud reports

Finnish tax officials have received a record number of tax evasion tip-offs since launching an online whistleblower service at the end of January. The tax administration says that nearly 80 percent of fraud reports now come in online.

Finland’s tax authorities appear to have struck a rich vein by introducing an electronic service for members of the public to report suspected tax fraud. Officials have reported a dramatic rise in tip-offs since the service became available earlier this year.

So far this year conscientious members of the public have turned in 2,200 tips about suspected tax evasion. Nearly 80 percent of those hints have come in online.

In 2014 tax officials received some 3,500 reports for the entire year. Audit manager Heimo Säkkinen has speculated that the number of tips will exceed last year’s total in May.

“During this year the number of tips has doubled compared to last year,” he added.

Informants flag income data cover-ups

Tax officials attribute the flood of misdemeanour information to the ease and effortlessness of making online fraud reports.

“Nowadays it’s a much easier option than paying a visit to the tax office, writing a letter or making a call. Nearly 40 percent of the online tip-offs we’ve received have come outside official hours of business, during the evenings or on weekends,” Säkkinen observed.

He added that the vast majority of informants wanted to report cases of suspected concealment of rental or wage income.

“Many tips also come in about a failure to comply with the requirement to issue receipts, and also in cases where companies don’t record sales as revenue,” he added.

Some reports filed in the heat of the moment

So far this year, just under half of tax evasion tips have resulted in follow-up action. Roughly 10-15 percent of cases end up in the hands of tax auditors and five percent are examined to determine compliance with the requirement to issue a receipt.

“We compare the information in the anonymous reports with tax administration data. If the informant says that a company has employees and our information shows that it doesn’t pay salaries, and then we set out to clarify the contradiction,” Säkkinen explained.

The audit officer noted that the majority of tips are justified and relate exclusively to tax matters.

“In some cases you can see that the report has been lodged in the heat of the moment. Then they usually exaggerate the financial significance of the suspected fraud,” Säkkinen concluded.