Spending watchdog: Failed collection system cost billions

Despite swallowing up an enormous sum, an ambitious project to create a unified system for collecting taxes and other state contributions has never been anywhere near completion, according to the Supreme Audit Office. Politicians have been blaming one another for the failure.

Supreme Audit Office, photo: Tomáš Adamec

The Unified Collection Point project was meant to establish a simpler, one- stop-shop method for the state to gather taxes, customs duty and social and health insurance.

It was approved in 2008 and was meant to be fully up and running by the start of 2014.

However, the government first postponed the launch date by 12 months and then cancelled the revised deadline completely.

The Supreme Audit Office says that the project has cost the Financial Administration (which collects taxes), the Ministry of Finance and the Customs Administration nearly CZK 3.5 billion.

The state’s spending watchdog says most of that money has not been used for its original purpose.

The Financial Administration used over 80 percent of the money on renovation work, bonuses, cars, uniforms and various other expenditures unrelated to the system.

Miroslav Kalousek, photo: Filip Jandourek

What’s more, the project’s managers didn’t even approve such spending, says the Supreme Audit Office, while work on an IT system for the Unified Collection Point has never even begun.

The project was meant to be overseen by a steering committee comprised of officials from the ministries of finance, health and social affairs. However, there is some confusion over who actually sat on it.

Former finance minister and leader of the opposition TOP 09 Miroslav Kalousek places the blame for the failure to launch the project on the current government.

“The Unified Collection Point was approved and entered the statute books in 2012. It was due to come into effect on January 1, 2015. The project was continuing, and if the government hadn’t abrogated the law bringing it into effect, it could have been in place from the start of 2015.”

However, the present minister of finance, Andrej Babiš of ANO, points the finger at earlier handling of the ambitious project.

Andrej Babiš, photo: Filip Jandourek

“The Unified Collection Point was a great project. But then Mr. Kalousek added to it tax reduction and the renovation of tax offices, and so on. The Supreme Audit Office has presented us with this report, and we have been saying that it was something in which our predecessors failed.”

A Ministry of Finance spokesman said the department had cancelled the project in a resolution in 2014 and had made no investment into it in the last two years. In June it launched a different system aimed at simplifying tax collection.