All VATs are susceptible to missing trader (MT) fraud. VATs adopted in an economic community are particularly more susceptible. The EU, for example, loses in excess of €100b annually to this fraud. Given the anticipated adoption of a European-style credit-invoice VAT in the GCC by January 1, 2018, this paper offers a technology-based solution involving the real-time tracking of taxable transactions with centrally collected (securely encrypted) data flows that are risk-analyzed by artificial intelligence (AI).
Richard T. Ainsworth & Musaad Alwohaibi,
VAT in the GCC - Missing Trader Frauds
Available at: https://scholarship.law.bu.edu/faculty_scholarship/1424