Germany plans tougher tax crime crackdown to raise billions in revenue
Germany is launching a major crackdown on tax crime to recover billions in lost revenue. The government unveiled a 26-point plan using tougher penalties, more investigators and artificial intelligence.
Finance Minister Lars Klingbeil said the goal is to stop honest taxpayers from being “taken for fools.” The package reclassifies tax evasion as a felony instead of a misdemeanour and raises the maximum prison term for organised tax crime from 10 to 15 years. Authorities will also end the current voluntary disclosure rule that lets offenders avoid prosecution by paying back taxes plus a surcharge.
The Zoll [Customs service] will get a big boost. About 1,500 new jobs will be added to its current workforce of roughly 49,000, and customs powers will be pooled. A new data analysis centre with Germany’s federal states will use artificial intelligence to spot fraud and improve coordination between agencies. Investigators will also get stronger powers to seize assets of suspicious origin.
Companies face stricter reporting rules. Businesses must submit value added tax reports faster through a new electronic system, and accounting records must be kept for 15 years instead of 10. Cash-heavy businesses will be required to use electronic cash registers. Justice Minister Stefanie Hubig said “tax crime must not pay” because it undermines trust in the constitutional state.
The Finance Ministry did not give an exact figure, but officials expect extra revenue in the billions of euros. The move comes as Germany faces budget pressure, with tax experts forecasting lower revenues through 2029. The government says hitting tax fraud is key to restoring fairness and funding public services.