Almost all Czech companies are honest in the way they pay and reclaim VAT. If they cross the line, it's usually by expensing an item that isn't technically eligible for a business deduction, such as a telephone for personal use. Very, very few Czech companies - merely a fraction of the total number of companies - engage in outright VAT fraud. We are even willing to wager that in most serious cases, it's an inside job, only made possible by the criminal collusion of tax, customs or police officials. (We wrote about this last week.) Yet the new Czech government wants to require all VAT payers, not just the shady ones, to send a report of their incoming and outgoing invoices - very sensitive data - to the finance ministry. What the NSA wouldn't even dare to try under the mantra of protecting against terrorism, the Czech government is planning to do under the mantra of fighting VAT fraud. We are all potential VAT terrorists now.