Slovakia launches receipt lottery to fight tax evasion

BRATISLAVA (AFP) - Every store receipt in Slovakia will double as a lottery ticket as of September, the finance ministry said on Monday in a bid to fight tax evasion.

Residents will be able to register the serial number of each receipt in a national lottery system from which 10 winners will be drawn twice a month.

The top prize will be 10,000 euros (S$17,100), but lucky shoppers will also be able to score smaller sums of cash or a new car.

"We want to give people an incentive to request a receipt every time they make a purchase and help prevent tax evasion," Finance Minister Peter Kazimir told reporters.

"Many of us rarely request a receipt but not everyone knows how much money is lost in the grey economy because of that." Slovakia has two value-added-tax rates: a 10-per cent rate applies to books, medication and medical items such as contact lenses, while a 20-per cent rate applies to everything else.

When vendors sell their goods without a receipt, they essentially avoid paying the VAT.

Slovakia loses around 150 million euros in revenue each year due to the grey economy, according to the ministry.

Tax evasion is a constant worry for the government - especially as it struggles to cut its budget deficit gap to under the EU ceiling of three per cent of gross domestic product.

Georgia launched a receipt lottery last year but cancelled it after seven months due to the low impact on national revenue.

Taiwan and Malta also have similar lotteries.