Government makes Penal Code changes to combat corruption

The government announced Friday that it will crack down on tax evaders and Social Security cheats with stiffer penalties, including lowering the amounts of money involved before an offense is considered a crime.

The Cabinet will send a bill to Congress making changes to the Penal Code that will also create a new type of crime involving tax fraud on amounts over 600,000 euros, which is mostly aimed at organized crime groups or those who stash away their money in offshore accounts to avoid paying the Spanish treasury. Maximum prison sentences on such cases will be hiked from the current two years to six years.

The government also wants to raise the statute of limitations for tax fraud cases from the current five years to 10 years in order to help combat public corruption. In recent high-profile cases, such as the Gürtel kickbacks-for-contracts scheme, prosecutors were unable to file a host of charges against some Popular Party (PP) officials because the statute of limitations had run out. A similar situation surfaced in the fraud investigation into former Castellón provincial administrator Carlos Fabra and his wife María Amparo Fernández, who are accused of embezzling some 1.2 million euros.

“The objective of this reform isn’t aimed at raking in more money for treasury,” a government source said.

Some weeks back, Deputy Prime Minister Soraya Sáenz de Santamaría said that prosecutors are trying to track down some six billion euros from tax fraud cases.