From: AlanBaggett@volcanomail.com   
      
   In Slovakia, Real Lottery Prize Goes to Tax Man : CRA SOTW   
      
   By SUZANNE DALEY and RAPHAEL MINDERAPRIL 19, 2014   
      
   BRATISLAVA, Slovakia -- When Jozef Lazarcik, a 35-year-old factory worker,   
   heard his number called on national television here recently, he pumped his   
   fists, hardly believing his luck.   
      
   He had registered only nine receipts with Slovakia's new tax lottery, and yet   
   he had just won a new car. "It's a heavenly feeling," he said before leaving   
   the studio, ready to encourage all of his friends to register their receipts,   
   too -- which is    
   exactly what Slovakian officials were hoping for.   
      
   Over the last 10 years, Slovakia's revenue from value-added taxes, a type of   
   sales tax, has declined. But hiring auditors and pursuing individual merchants   
   and service providers in court is expensive and slow. So last fall, the   
   government decided to put    
   a lottery in the mix.   
      
   The idea is to enlist average citizens to collect receipts from their   
   purchases and register them with the government, creating a paper trail for   
   transactions and forcing restaurant and shop owners to pay the sales taxes   
   they owe. As Slovakians register    
   their receipts for the lottery, a computer will also tell them if a merchant   
   has issued a receipt with a fake tax identification number, so they can report   
   suspected fraud.   
      
   For any purchase worth more than 1 euro, or about $1.38, Slovakians can enter   
   their receipts in a monthly lottery to win EURO 10,000, a car or a chance to   
   be a contestant on the Slovakian version of "The Price Is Right."   
      
   Tax officials say the lottery is already having a big impact, and other   
   European countries that are also struggling with the collection of value-added   
   taxes have considered it -- including Portugal, which started its own tax   
   lottery on Thursday. In    
   Slovakia, about 450,000 people have taken part, registering about 60 million   
   receipts, officials said.   
      
   Complaints about merchants who will not give receipts have skyrocketed. In the   
   six months before the lottery began, the government received about 300 such   
   complaints, officials said. In the first few months after it started, that   
   number rose to 7,000.   
      
   "It has been a huge success so far," said Peter Kazimir, Slovakia's finance   
   minister.   
      
   Value-added taxes are an important source of income for European countries,   
   but collecting them has grown more and more difficult during the economic   
   crisis. A recent report for the European Commission found that uncollected   
   value-added taxes in the    
   European Union -- a measure known as the value-added tax gap -- amounted to   
   about $267 billion in 2011. Across the bloc, that gap increased by five   
   percentage points on average since the onset of the debt crisis in 2008.   
      
   But for some countries -- especially Greece, Ireland, Latvia, Portugal,   
   Slovakia and Spain -- the problem has been particularly acute. A decade ago,   
   Slovakia was able to collect about 80 percent of taxes due, said Peter Golias,   
   the director of Ineko, a    
   nonprofit economic research group here. That figure is now about 60 percent,   
   putting Slovakia in a league with Greece for the poorest record on the   
   collection of value-added taxes.   
      
   Mr. Golias said some people had been inspired to play the lottery because they   
   were tired of tax cheats. "They really want to help," he said.   
      
   For others, it is more about winning. Sylvia Skanderova's father once won   
   about $11,000 in a lottery. That has made him an eager participant in   
   lotteries of all kinds, she said, but particularly this one, because it costs   
   nothing to play. He spends three    
   hours every Sunday registering receipts.   
      
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   "The neighbors, they know my father does this, so they bring him receipts,"   
   said Ms. Skanderova, 26. "Every Sunday his eyes are bloodshot. We have huge   
   plastic bags in the basement with receipts."   
      
   Zuzana Candikova, a manager at Planetka Restaurant here in Bratislava, the   
   capital, is hoping to win a cash prize that she would use to help buy an   
   apartment. She collects receipts that her customers leave behind, but she has   
   a friend who does the    
   registering. If they win anything, they will split it, Ms. Candikova said.   
      
   The lottery is not Slovakia's only push to increase its tax collection. In the   
   last few years, under pressure from the European Union to improve its finances   
   and attack corruption, the government has also run a "name and shame" campaign   
   against tax    
   cheats, raised the salaries of tax inspectors and stopped political   
   appointments in the tax office, among other measures.   
      
   Tax collection began to increase early in 2013 and rose more sharply after the   
   lottery began. Officials say they collected about $512 million more in 2013   
   than in 2012. How much of that is a result of the lottery may never be clear.   
      
   But Mr. Kazimir said that it was surely a big factor, and that it had cost   
   only about $276,000 to get the lottery going. He said the new influx of   
   complaints had already proved that it was not just small businesses that were   
   cheating: Chain stores have    
   also been caught giving fake receipts.   
      
   In Portugal, too, the value-added tax gap has grown since the start of the   
   economic crisis. Having asked for a bailout of about $108 billion in 2011, it   
   is under pressure from its creditors to do better.   
      
   Portuguese officials believe their tax lottery will be especially effective   
   because gambling is popular among Portugal's 10 million inhabitants, who are   
   already among the biggest participants, in terms of spending per capita, in   
   the EuroMillions lottery    
   shared by nine European countries. Over the past decade, the Portuguese have   
   spent an average of about $1.2 billion a year on EuroMillions.   
      
   Paulo Núncio, the Portuguese secretary of state for tax affairs, said the   
   government was counting on the new lottery to raise its tax revenue by about   
   $830 million to $1.1 billion.   
      
   Even before the start of the Portuguese tax lottery, it was generating   
   excitement. In the food court of the Amoreiras shopping mall in Lisbon   
   recently, customers ordering hamburgers joked that their lunch order could   
   result in a new car.   
      
   The lottery project has drawn criticism from some Portuguese opposition   
   politicians who say it is a capitalist tool to turn citizens into tax   
   inspectors.   
      
      
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