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BAE Systems PLC unveiled intentions to double its customer base as Europes largest defense company plans to sell its NetReveal anti-tax evasion software to several of Europes governments.

“Digital defense is the new frontier. It is a reality now,” said George Robbins, senior director and general manager at NetReveal, cited by the Financial Times. “For people like ourselves with a technology and defense background it is a tremendous opportunity.”

Europe estimates losses of €170 billion in unpaid VAT every year, of which large part are caused by networks of shell or ghost companies. BAEs NetReveal is aimed at identifying organized tax schemes and is already working in more than 30 countries, with expectations that number to double within 24 months.

Typically tax fraud is achieved by importing and exporting goods by several companies, located in different countries, who are owned by the same person or are a part of an organized group. The companies begin a cycle of trading the goods among themselves until a targeted company is eligible for a VAT refund and another is legally obligated to pay taxes, but never does. In the end of the cycle the two companies disappear with a profit.

However, NetReveal allows governments to use it in order to reduce tax fraud. The software goes through vast amounts of data, including payments, exports, imports, company ownership, and outlines suspicious behavior enabling regulators to easier find and stop illegal activities. The program could also be used to detect healthcare fraud.

“What it is particularly adept at is pulling out organised groups. Tax fraud, at scale, is normally executed by organised criminals or gangs that treat this as a business,” Mr. Robins says.

Slovakia, which projects it yearly tax-fraud losses at more than €3 billion, bought and implemented NetReveal in March. For a month the software covered its price and the country posted €500 million more in taxes within six months of purchase. Following Slovakias success, the Czech Republic, Poland and Hungary have all initiated talks with BAE related to a possible buy of the software.

“We have never had a client that has not made their money back in a very short period of time,” said Mr. Robins added. “This is a very strongly growing part of our business.”

BAE Systems PLC gained 0.32% on Monday and closed at GBX 475.60 in London. On Tuesday the stocked edged up 0.15% to trade at GBX 476.30, marking a one-year increase of 9.75%. The company is valued at £15.00 billion. According to the Financial Times, the 22 analysts offering 12-month price targets for BAE Systems PLC have a median target of GBX 477.50, with a high estimate of GBX 550.00 and a low estimate of GBX 370.00. The median estimate represents a 0.40% increase from the last close price of GBX 475.60.

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