Minister: MTA bank account information request only concerns companies

A Tax and Customs Board (MTA) request that banks start providing them with information about the sums of money that have passed through accounts held with them concerns problematic companies, and not not private individuals, Finance Minister Mart Võrklaev (Reform) said Monday.
The MTA itself however finds that data should also be collected about private individuals.
As reported by ERR News, the MTA has come up with the concept of banks starting to provide them with aggregated information about the funds that pass through bank accounts, in the interests of combating money laundering and other crimes.
At the same time, the MTA says, this does not only concern the accounts of companies, but also private individuals.
Raili Roosimaa, the authority's deputy general director, has said confirmed that the requested information concerns both taxpayers who are natural persons, and those who are legal persons (legalese which is referring to private citizens and firms respectively – ed.).
ERR asked Minister Võrklaev where his idea of the MTA only tracking funds used by company accounts comes from. His response was that the MTA does not want to receive data on all companies, but only on those seen as risky, and on the basis of certain criteria, via analysis and in a generalized format.
He said: "Even now, the MTA can request all the necessary financial information from the banks during the tax procedure," he said.
The MTA's goal is to collect the existing taxes as efficiently as possible, he added, and given the paucity of resources of officials, and not to bother those who are performing effectively.
According to the minister, honest businesses therefore do not need to worry.
"In other words, the planned exchange of data does not concern all companies or transaction information. With the current possibilities, it is difficult for the Tax Office to reach with inspections those entrepreneurs who operate "in the dark" and hide their activities. Although a lot of soft measures, nudges, and reminder letters are used, they often go unnoticed," Võrklaev went on.
Võrklaev stressed that the plan primarily concerns problematic companies which do not pay taxes, including VAT, in full, causing the state loses in the order of tens of millions of euros in tax revenue per year.
Similar types of reporting have been established by an increasing number of countries, he said, while in Estonia, where the discussion has only just begun, all the pros and cons are definitely being considered.
"The main focus is on firms which are not registered as VAT payers, in which, as a result of the analysis, there is a suspicion that their turnover actually exceeds the limits on that. Of course, the MTA would not investigate all account movements in these cases," Võrklaev continued.
Which risks society wishes to emphasize the most in the context of payment compliance is a matter for discussion, he added.
When asked whether the situation in which the tax office receives information about the amounts moving within the accounts does not infringe on privacy, Võrklaev said that, since private individuals are not covered by the plan, there is no reason to discuss it.
He said: "What exactly to do and how to do it are dialogues which have only just gotten underway; the ministry first met with the banking union. The talks will continue, and we will certainly not do anything in a rush and without consulting the parties involved.
Raili Roosimaa at the MTA answered the question whether the proposed change would mean that, if there were movements in a private person's bank account which the risk analysis considers suspicious, the authority would have the right to scrutinize individual transactions made with the account, by saying that the Payment Order Act already gives MTA the opportunity within the framework of the tax procedure, to request information from banks about both natural and legal persons.
"We also only do this if the individual refuses to cooperate and does not voluntarily submit the documents to us," she clarified.
According to Roosimaa, the MTA has come up with various proposals on how to collect the existing taxes efficiently and at low cost, but which of them will be included in the intention to develop the law in the end, will be determined as a result of the negotiations, led by the Ministry of Finance.
Roosimaa said: "At-risk persons are important to us and the data on them will be held in a generalized form in order to identify problematic individuals. We will not ask for transaction information, and do not want to bother honest taxpayers."
The banking union however opposes the change in this form, and considers that the legal admissibility, necessity and proportionality of the plan raises questions.
Reinsalu: 'China-style' personal state concept has to go
Isamaa Chair Urmas Reinsalu called the MTA's plan to build a "Chinese-style" personal state, referring to the PRC, adding that, according to him, the government should throw this proposal in the garbage can.
He said: "Somehow by itself, without any social agreement, people's privacy is being rolled back, step by step. Creating such a 'Big Brother' mega data base to profile the functioning of the entire society is wholly unacceptable."
The Isamaa leader, seeking election at the ongoing European elections, added that it would be appropriate for the Reform-SDE-Eesti 200 government to unequivocally declare the plan abandoned, rather than preparing it on the quiet, by finessing the details.
"'Government officials use the argument that the honest have nothing to fear:' This is a skewed line of thinking, because surveillance like that potentially puts all members of society in an allegedly unfair status, and they can then be profiled," he said.
The MTA already has sufficient tools to carry out procedures which the proposed changes would aim to address, Reinsalu claimed.
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Editor: Andrew Whyte