AD ALTA
JOURNAL OF INTERDISCIPLINARY RESEARCH
public debt, the tax gap also rises. On the contrary, among our
variables, we considered only the population, which harmed the
tax gap. Thus, with an increasing population, the tax gap is
falling. The up-to-datedness and investigation of VAT have
recently been intensively discussed topic, both at the level of
individual governments and at the level of the European
institutions. The EU and the Member States lose a significant
proportion of VAT revenue annually. In the context of public
finance deficits, it is not an effective solution to increase
revenues through an increase in VAT rates. Therefore, the
European countries are trying to put in place effective measures
that, without raising taxes, would ensure better tax collection.
8 Conclusion
Based on the analysis, we can conclude that the highest tax
evasion during the whole observed period was in Germany,
France, United Kingdom, and Italy. On the other hand, the
lowest tax evasion in the EU was quantified in Malta, Cyprus,
and Latvia. From time point of view, VAT evasion grew every
year, except 2009 when tax evasion decreased by 18% in
comparison to previous year. This drop was influenced by many
indicators, such as tax revenues, corporate profits, total final
consumption, or commodity prices. However, there were some
EU countries (Luxembourg, Germany, and Austria) where tax
revenues did not decrease in 2019. The decline in tax evasion
can be explained by a decrease in the individual components of
tax liabilities, where the most significant drop was recorded in
intermediate consumption and gross fixed capital formation in
comparison to 2008. Since these tax liabilities components were
considered in our calculation as a percentage of output that was
exempt from VAT, the most significant was the decrease in final
household consumption by 333,000 mils. EUR caused by the
financial crisis. The regression analysis confirmed that most
variables have a positive impact on the growth of the VAT tax
gap. Throughout the EU countries, VAT evasion is most affected
by the import-to-GDP ratio, corruption index, intermediate
consumption and, of course, the standard VAT rate, and so
increasing value of these indicators will increase VAT tax
evasion. Among the observed variables, it was confirmed the
positive correlation in total consumption and population size.
Thus, increasing these variables will reduce VAT evasion.
Detecting and taking action to reduce tax evasion, as well as
collecting tax itself is a complex process. Tax evasion cannot be
prevented completely, but at least government can reduce it by
applying some recommendations, limits, or ways how to prevent
tax evasion.
Literature:
1. Agha, A., Haughton, J.: Designing VAT systems: Some
efficiency considerations. Review of Economics & Statistics,
Vol. 78, No. 2. 1996. p. 303-308. ISSN: 0034-6535.
2. Aizenman, J., Jinjarak, Y.: The collection efficiency of the
Value Added Tax: Theory and international evidence. Journal of
International Trade and Economic Development, Vol. 17 No. 3.
2008. p. 391-410. ISSN: 0963-8199.
3. Barbone, L., Belkindas, M., Bettendorf, L., Bird, R.M., Bonch
Osmolovkiy, M., Smart, M.: Study to quantify and analyse the
VAT Gap in the EU-27 Member States. CASE Network Reports.
2013. p. 116.
4. Bird, R.M., Martinez-Vazquez, J., Torgler, B: Societal
institutions and tax effort in developing countries. The
Challenges of Tax Reform in a Global Economy. 2006. p. 283.
ISBN 978-0-387-29912-9.
5. CASE: Study to quantify and analyse the VAT gap in the EU-
28 member states . Warsaw : Center for Social and Economic
Research. TAXUD/2015/CC/131. 2018.
6. Claus, I.: Is the value added tax a useful macroeconomic
stabilization instrument? Economic Modelling, Vol. 30. 2013. p.
366-374. ISSN: 0264-9993.
7. Dovilé, K.V.: Value added tax system and dynamic of rate in
the period of European union crisis. Social Transformations in
Contemporary Society, Vol. 2013 No.1. 2013. ISSN 2345-0126.
8. Ebrill, L.P., Keen, M., Bodin, J. P., Summers, V.P.: The
modern VAT. International Monetary Fund. November 6, 2001.
p. 242. ISBN: 978-1589060265.
9.Eurostat Data Database. Available at: <https://ec.europa.e
u/eurostat/data/database>. 2019.
10. European Commission.: Council Directive 2006/112 / EC of
28 November 2006 on the common system of VAT. 2006.
11. European Commission.: European system of accounts - ESA
2010, Handbook. Luxembourg. 2013. ISBN 978-92-79-31242-7.
12. European Commission.: VAT Rates Applied in the Member
States of the European Union. Situation at 1st January 2016.
13. Gemmel, H.: The Tax Gap: A Methodological Review.
Victoria University of Wellington, New Zealand, Working Paper
09/2012. 2012
14.
Glova, J., Werner B., Tulai, O.: Determinant Effects of
Political and Economic Factors on Country Risk: An Evidence
from the EU Countries. Montenegrin Journal of Economics Vol.
16. No. 1. 2020. p. 37-53. ISSN: 1800-5845
15. Halkidi, M., Batistakis, Y.A., Vazirgiannis, M.: On
Clustering Validation Techniques. Vol. 17 No. 2-3. Journal of
Intelligent Information Systems. 2001. p. 107–145. ISSN: 0925-
9902.
16. Hospodárske noviny: Kríza postihla všetkých
členov EÚ.
Niektorých viac, iných menej. Available at: <http://dennik.hn
online.sk/ekonomika-a-firmy/225236-kriza-postihla-vsetkych-
clenov-eu-niektorych-viac-inych-menej>. 2009.
17. Hutton, M.E.: The Revenue Administration–Gap Analysis
Program: Model and Methodology for Value-Added Tax Gap
Estimation. Fiscal Affairs Department, International Monetary
Fund. March 2017. ISBN: 978-147-5583-618
18. Keen, M, Lockwood, B.: The value added tax: Its causes and
consequences. Vol. 92 No. 2, Journal of Development
Economics, 2010. p. 138-151. ISSN: 0304-3878.
19. Kubascikova, Z., Tumpach, M., Juhaszova, Z., Turebekova,
B., Saparbayeva, S.: Contextual Non-financial Information
Analysis of Annual Reports. 16th Annual International Scientific
Conference on European Financial Systems. 2019. p. 334-344.
ISBN: 978-80-210-9338-6
20. Louvot-Runavot, C.: L’évaluation de l’activité dissimulée
des entreprises sur la base des contrôles fiscaux et son insertion
dans les comptes nationaux. Institut National de la Statistique et
des Études Économiques. Document de travail G2011/9. 2011.
21. Mura, l. (2019). Entrepreneurship internationalization–case
of Slovak family businesses. Ad Alta: Journal of
Interdisciplinary Research, 9(1), 222-226.
22. Papcunová, V., Novaková, B.: Real Estate Tax as Part of
Municipal Tax Incomes (Case Study). 13th International
Scientific Conference on Public Economics and Administration.
2019. p. 321-330. ISBN: 978-80-248-4356-8
23. Ramona, M.E., Ionut, C., Cristian, M.: Value Added Tax in
The Economic Crisis Context. European integration–new
challenges. Vol. 1 No. 1, 2011. p. 389-395.
24. Reckon, LLP: Study to quantify and analyse the VAT gap in the
EU-25 Member States. Taxation Studies 0029, Directorate General
Taxation and Customs Union, European Commission. 2009.
25. Rodrigues, C.: VAT revenue estimation on an accrual basis
(based on IMF methodology). Autoridade Tributaria e
Aduaneira, Centro de Estudos Fiscais e Aduaneiros,
CTF Article
pgs 7-21/2015, Febraury. 2015.
26. Rubin, M.: The practicality of the top-down approach to
estimating the direct tax gap. Paper presented at New
Perspectives on Tax Administration: An IRS-TPC Research
Conference, Washington. Her Majesty’s Revenue and Customs.
2011. p. 109-127.
27. Toder, E.: What is the tax gap. Tax Notes. Vol. 117 No 4.
2007. p. 367-378.
28. Zidková, H.: Determinants of VAT gap in EU. Prague Economic
Papers. Vol 23 No 4. 2014. p. 514-530. ISSN 1210-0455
29. Valentinyi, A.: The Hungarian crisis. VoxEU, Centre for
Economic Policy Research, London. Retrieved Jun 10, 2019,
from http://voxeu.org/article/hungarian-crisis. 2012.
Primary Paper Section: A
Secondary Paper Section: AH
- 13 -