The billing software used by Portugal's restaurants has allowed owners to delete cash sales if an invoice with fiscal number is not requested by the customer.
Because there are flaws in the legislation and in the authorised range of software, the Tax Authority has lost more than €500 million in VAT receipts each year with 40% of payments still being made in cash.
Pedro Sousa, the chief executive of Zone Soft, one of the companies that supplies software to the catering sector, said the current systems give restaurants and cafes the possibility of deleting all records of cash sales, as long as an invoice with taxpayer number has not been handed out.
"I can, for example, create a specific series for a certain type of document, such as cash sales, then someone with a minimum of computer knowledge can delete that series. Those documents are not declared and the VAT paid by the taxpayer is not delivered to the State," as it is snaffled by the restaurant or cafe owner.
Sousa says the existing legislation is insufficient to cover this anomaly and that tax evasion is widespread, often encouraged by those selling the software.
Pedro Sousa has alerted the Tax Authority, the Ministry of Finance and even the Ombudsman but has got nowhere as in order to change the legislation, "there has to be political will" and there appears not to be.
According to Sousa's calculations, as a result of the software approved by the State the Treasury is around €500 million a year out of pocket.
This tax evasion is not likely when the customer has asked for a receipt with his tax reference number on it as the restaurateur would be foolish to take the chance that this receipt will not later be entered by the customer onto his own e-Finanças receipts log.
The Tax Authority selected and approved these software packages which turn out to contain an inbuilt way for the restaurant trade to avoid having to hand over the VAT charged to the customer.
The thought of having these software systems tested before launch, to spot any such obvious errors, seems not to have crossed anyone's mind at the Tax Authority, despite being in a country supposedly awash with young, thrusting, computer experts.
