The Tax and Customs Board is struggling to tame the sugar industry, which - in addition to tobacco, alcohol and motor fuel - is a major culprit when it comes to VAT evasion.
Last year, tax authorities estimated that around 225 million euros was withheld from the state through VAT evasion, reported Äripäev. The sugar wholesalers contributing to that say that up to half of sugar stocks they purchase could have off-the-books origins.
In one instance last May, officials searched 16 facilities in Tallinn and the surrounding county, detaining seven individuals.
The group used cover enterprises to buy sugar from other EU countries, thereby circumventing the payment of 600,000 euros in VAT.
Alo Süvar, the head of Montemari, a wholesaler, said sugar imports have decreased by a third in the last few years but that consumption should be around the same level.