Analysis of the Decisive Factors of the VAT Gap

Radu Ciobanu, Adriana Florina Popa and Daniela-Nicoleta Sahlian
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Radu Ciobanu: Bucharest University of Economic Studies
Adriana Florina Popa: Bucharest University of Economic Studies
Daniela-Nicoleta Sahlian: Bucharest University of Economic Studies

CECCAR Business Review, 2023, vol. 4, issue 1, 50-57

Abstract: This paper aims to identify the possible factors that influence the value added tax gap – the VAT gap. The VAT gap is an estimate of the unpaid VAT in the economy, calculated as the difference between the theoretical obligation for the value added tax that can be collected in respect with all the transactions in the economy and the actual VAT paid to the state budget. A high value of this indicator may highlight issues related to tax evasion and the inefficiency of the tax system. The article summarizes existing studies that quantify the VAT gap and aims to identify the relationship between the VAT gap or the VAT revenues and various economic, fiscal and social factors present in EU member countries. The panel regression and clustered regression models have been used in this paper in order to determine the statistically significant variables that have an impact on the VAT gap.

Keywords: VAT; VAT gap; collection deficits; tax fraud; tax evasion (search for similar items in EconPapers)
JEL-codes: C23 F15 H21 H22 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ahd:journl:v:4:y:2023:i:1:p:50-57

DOI: 10.37945/cbr.2023.01.06

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