AD ALTA
JOURNAL OF INTERDISCIPLINARY RESEARCH
ES
35,599
34,586
37,705
39,570
42,938
43,724
45,687
FI
10,757
11,434
11,954
11,878
11,664
12,090
12,369
FR
125,872
128,760
127,932
131,572
134,028
135,178
142,451
GR
6,357
5,819
5,158
5,139
5,254
5,817
5,964
HR
2,323
2,448
2,505
2,564
2,706
2,857
3,057
HU
5,706
5,869
5,895
6,568
7,205
7,188
8,037
IR
6,265
6,095
6,029
6,666
7,067
8,344
8,359
IT
76,409
73,754
70,792
73,359
73,143
74,741
78,336
LT
891
873
867
901
962
981
1,065
LU
2,596
2,935
3,187
3,641
3,327
3,377
3,504
LV
571
655
691
736
793
855
908
MT
284
302
316
364
389
407
461
NL
50,144
50,892
50,980
51,286
53,300
56,472
60,584
PL
15,629
14,300
14,589
15,724
16,443
16,911
19,821
PT
6,093
5,630
5,685
5,949
6,161
6,295
6,816
RO
4,154
4,243
4,265
4,298
4,743
4,045
4,207
SE
27,374
28,585
28,518
28,174
29,934
31,874
32,828
SI
1,433
1,359
1,425
1,437
1,493
1,545
1,625
SK
2,168
1,960
2,179
2,458
2,802
2,795
3,097
UK
89,779
95,000
96,955
102,411
119,236
101,237
97,401
Total
813,834
819,094
823,500
858,896
902,108
909,553
946,432
Source: own calculation based on Eurostat (2004-2018)
6.1 The tax gap analysis
The fact that tax gaps grew continually can be explained by an
increase in the final consumption of individual component of tax
liabilities. In 2009, there was reported a steep drop in tax gaps in
all the Member States caused by a decrease in total tax liabilities
(the most significant decrease was in intermediate consumption
by 1,499,000 mils. EUR in the EU). The gross fixed capital
formation has fallen by 404,000 mils. EUR in comparison to
2008. Since in the calculation the components of tax liabilities
were expressed as a percentage of output exempt from VAT,
then from this point of view the most significant drop was in
final household consumption by 333,000 mils. EUR.
6.2 Tax revenues
In 2009, tax revenues in the EU fell by 18% in comparison to the
previous year. It can be explained by the fact that state budgetary
revenues significantly decreased in the financial crisis due to the
impact of many indicators, such as tax revenues, corporate
profits, the final consumption, or commodity prices. In this
context, in all EU countries, there was an increase in the
budgetary deficit, and it occurred the problem of the
impossibility of financing public expenditure. The highest
decrease in VAT revenues was reported in Romania by 29%,
Latvia by 28%, and in Spain by 25%. However, in Luxembourg,
Germany, and Austria in 2009 tax revenues did not fall.
Figure 1 Percentage of year-to-year change in tax liabilities, tax revenues and tax gap in the EU
Source: own calculation based on Eurostat (2019)
6.3 The global financial crisis in 2009
The crisis year 2009 meant for the Member States difficult
period. Gross domestic product in the EU fell by 2.5% quarterly.
The negative economic environment was the most affected by
the Slovak economy, which fell by 11.2%. This steep economic
drop caused a decrease in foreign demand. Also, the gas crisis
and the production limitation played its role in this recession in
Slovakia. As a result of the crisis, most countries have set a
government budgetary deficit above 3% of GDP. The
government consumption slightly rose, NPISH increased
negligibly, however, output for final consumption of non-
financial corporations dropped by 13,000 mils. EUR together
with VAT effective rate. Within the Baltic States, the financial
crisis hit the worst Latvia, which had the slowest economic
growth, high state’s deficit at the level of 12% and enormous
government expenditures. Despite the Latvian government
measure which rose the standard VAT rate from 18% to 21%,
tax revenues decreased rapidly. Also, there was a drop in
intermediate consumption, household consumption, and GDP.
Due to the crisis problems, Latvia asked the International
Monetary Fund (IMF) and the EU for emergency rescue loan in
the amount of 7.5 bill. EUR. To provide this financial
mechanism, there was a request by the IMF to decrease deficit
under 4.9% of GDP. Macroeconomic indicators in Romania are
for many years under the European average level. The financial
crisis, moreover, caused an increase in the VAT rate from 19%
to 24% in 2010. This government measure was important for the
Romanian budget, as well as tax revenues and consumption
because consumption has fallen since 2009 rapidly. We have to
-10,00%
-5,00%
0,00%
5,00%
10,00%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
liabilities
tax revenues
tax gap
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