€10 billion in unchecked overseas transfers confirmed as 'a computer error'

The final Tax and Customs Authority audit and report on the information and control system for transferring money from Portugal to overseas accounts, concludes it is "extremely improbable" that the €10 billion that left the country without the taxman knowing about it, was caused by human hand.

According to the report, the systems failure between 2011 and 2014 that let €12.5 billion slip away without a murmur, was not deliberate, despite it being very convenient for those who should have been investigated by the taxman to check that any taxes due indeed had been paid.

As for finding out who contributed to the billions the left Portugal’s banking system, the report concludes that this is all covered by banking secrecy rules, so if we really want to know, the government will need to change the secrecy laws.

In this regard, the audit report recommends that the Tax Authority submits legislative proposals, or maybe cooperates with the Bank of Portugal, to find a way legally to share information on these cross-border transfers.

Between 2011 and 2015, while Paulo Núncio was Secretary of State for Tax Affairs, the transfer statistics were not published on offshore transfers despite this having been the law since 2010.

One of the concerns, and a situation that leaves a whiff of suspicion in the air, is that over half of these transfers were from wealthy account holders at Banco Espírito Santo who possessed the uncanny foresight to move their money overseas before the bank went bust in August 2014.

It is open to criticism that the Tax and Customs Authority carried out this audit rather than a body perceived as having greater independence.

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