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.

Join ST's Telegram channel and get the latest breaking news delivered to you.