Norway Tax Auditors Want To Open Source Cash Registers To Combat Fraud

Qedward writes "The Norwegian Ministry of Finance seems to be taking a bit of stick at the moment. It wants all the existing cash registers in the country thrown out and replaced with new ones. Not surprisingly, this massive upgrade is not popular. But it is apparently being pushed through in an attempt to prevent cash registers' figures being massaged downwards in use so as to reduce tax. The Norwegian association of tax auditors said: 'The source code must be opened.' 'Without source code it is not possible to determine whether or "hidden" functionality exists or not. Just knowing that the tax authorities have access to the source code of the application, will reduce the effort to implement hidden functionality in the software.'"

Just releasing the source may not fix it

[phaunt]

Releasing the source doesn't guarantee that a specific cash register is also running that code. So will this be all that helpful?

Re:Just releasing the source may not fix it

[larry bagina]

and it doesn't guarantee that the compiler doesn't have a backdoor [bell-labs.com] of it's own.

Re:Cracking down on cash...

[Belial6]

Not being possible to drive out more than one copy of the receipt would be a disaster. Receipt printers are notoriously temperamental. If I want a receipt the store needs to be able to print it. Maybe require that the copy number be printed on the reciept, sure. But not to print a copy at all is just unworkable.

Re:Just releasing the source may not fix it

[rsagris]

Would people quit using this as an example of doubt? Show a real, honest to God, in the wild example of a widely used backdoor inserting compiler, or just STFU about it because while it might be possible it isn't in anyway practical or plausible enough to mention. If it was so easy to write a general use backdooring compiler, then it'd be actually seen, not fantasized about. -rs

Re:Just releasing the source may not fix it

[bloodhawk]

Not to mention you can just not register the cash in the machine or have separate machines that don't report centrally or any number of other ways. The machine being auditable only works if every other part of the sales process is auditable and controllable and really this isn't possible in anything but the largest organisations.

Re:Just releasing the source may not fix it

[OeLeWaPpErKe]

We're talking here about tax departments that cannot manage to keep spreadsheet software operational on their office systems, cannot keep their own tax databases accessible of backed up, and worse. Never mind the fact that hardly any business administration is ever really correct in the first place. Having them run a centralized online service for millions and millions of customers sounds like a spectacularly bad idea. Besides, what about businesses without internet connection ?

I was amazed, when I first saw this, but cash registers never contain the amount of money their record claims they should at the end of the day. My jaw dropped to the floor for 20 minutes when I was told the same goes for ATMs. It tends to be a shortage because people are much more likely to complain when shortchanged (mostly accidentally), so it's expected to be a negative correction, up to 5% of the amount sold. This presents an obvious way to cheat that the taxman cannot (reasonably) attack businesses for.

Re:Just releasing the source may not fix it

[bogjobber]

Where to begin......

The Laffer curve, while an inarguable *concept*, doesn't actual help us in any way set tax policy because nobody knows where the tax rate that most efficiently produces revenue actually lies. Knowing that the graph is of a quadratic shape doesn't help at all if you don't know what the formula looks like.

You'll notice that the Laffer curve is always used to argue for lower tax rates, not higher, but the US individual tax rate is actually significantly *lower* than the most optimal tax rates predicted by most academic studies. Most of those studies put it in the 65-70% range, and I don't see many people that love to use the Laffer curve in arguments saying we should raise tax rates.

Secondly, this is talking about sales tax and VAT, *not* income tax. The Laffer curve has little to do with consumption taxes. Having a high taxation rate for different sorts of consumption taxes can actually have substantial benefits depending on what you're trying to do. Norway does have an extraordinarily high sales tax. AFAIK it is one of the highest in the world, which leads to lots of interesting behavior from their citizens as they try to avoid those taxes. It also leads to decreased consumption and more judicious use of resources.

Either way, Norway is usually at or near the top of the list for everything from education, health care, income equality, poverty, corruption and most everything else by just about any sort of metric that measures the effectiveness of government, so they're obviously doing something right.