Electronic Tax Fraud – Are There “Sales Zappers” In Japan?
Skimming cash receipts is an old fashioned tax fraud; a fraud traditionally associated with small or medium sized enterprises. Large businesses with formalized internal control mechanisms, external accountants, and professional management structures do not normally engaged in skimming.[1] Businesses that skim frequently keep two sets of books (one for the tax man, the other for the owner). In its simplest form there are two tills, and the cashier simply diverts…
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Wow! Informative or what. I can’t say I understood every word of it (down to my lack of knowledge), but I got the gist and it does seem like this could present a big problem for tax authorities. It could be an especially big problem in places where tax authorities’ resources are limited.
I’m from the UK and I’ve heard about various cases of people operating cash businesses being caught out, but it was pure coincidence in most cases. A typical example was a man who owned a fish and chip shop ( they are a 100% cash business in most cases), he was reporting very little income, of course it was very difficult to prove that he was underreporting income, but his lifestyle suggested to HMRC that he was. In the end they got him by showing that there was a big gap between his potato purchases and the amount of revenue he was reporting. So, even traditional cash skimmers, of whom there will be no electronic records, can be caught, but it’s always going to be rare.