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TAX FRAUD, SOCIAL SECURITY FRAUD: COMMON ISSUES

Introduction

For some people, the causes and effects of tax frauds and social frauds have to be
examined separately. For other people it's not the social organizations' mandate to
participate in the fight against fraud, because they have been established to provide
benefits to people, and particularly to frail people. Due to the changes that have
been taken place since the mid-20th century in our societies, in people's priorities
and in their economic environment and even because the recent economic crisis,
the weight of frauds on public finances and their perception by the general public
have forced many governments to adopt new regulations and new institutions so as
to be more efficient in front of fraudsters. This article tries to give a general
overview on the French experience in this domain.

Background

Until the late 2000s, before the outbreak of the financial and economic crisis of
2008, tax and social security frauds were subject to distinct analyzes and separate
treatment from the administrations and public bodies concerned. Tax evasion was
still in the early 2000s considered a "national sport" in some countries. This positive
image of the sport was totally inadequate with the gravity of the fraud. At the same
time, social fraud was not really the subject of particular attention, mainly because
of a rather inaccurate knowledge about the level of fraud, except concerning illegal
employment.

During this time, France did not distinguish its European neighbours in the fight
against tax fraud and social fraud. Each administrations concerned (DGFIP for taxes
and VAT; DGDDI for custom taxes and excise duties; DSS for social contributions and
benefits; Pôle Emploi for unemployment benefits) had been implementing its fraud
risk prevention policy, and had organized control accordingly.

The 2008 financial crisis while hitting all countries obligated governments to
question the relevance and effectiveness of various national and international
mechanisms in the fight against fraud affecting public finances. In the context of the
economic crisis that gave rise to both the tax revenues' reduction and the
expenditure increase based on national solidarity, fraud and abuse issues became
more pervasively present. France has not escaped this situation and had as its

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