Tax avoidance: the aspect of value added tax

Egidijus Bikas () and Greta Bagdonaitė ()
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Egidijus Bikas: Vilnius University, Lithuania
Greta Bagdonaitė: Vilnius University, Lithuania

Entrepreneurship and Sustainability Issues, 2020, vol. 8, issue 2, 590-605

Abstract: Tax avoidance is probably as old phenomenon as the taxes themselves. The literature has disclosed that tax avoidance is a worrying problem facing not only the Baltic economies but also the global economy. Tax avoidance and VAT in particular, undoubtedly causes significant damage to the functioning of the public sector and to the financing of public expenditure, because the fiscal significance of this tax is very high. On the other hand, the VAT gap is a significant problem, as in Lithuania in the period of 2012 - 2018 it ranged from 200 to 300 million Euros; the Lithuania's budget lost so much money every quarter. The article aims to identify the factors influencing the VAT gap in the Baltic States. The study is performed using quantitative methods. The influence of optional factors on the VAT gap is determined by performing a correlation-regression analysis of the Baltic States. The study showed that the tax gap, migration and tax rate factors had the largest impact on the VAT gap in the Baltic States.

Keywords: taxation; tax behavioral; tax avoidance; value added tax (search for similar items in EconPapers)
JEL-codes: G40 H20 H26 H27 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:ssi:jouesi:v:8:y:2020:i:2:p:590-605

DOI: 10.9770/jesi.2020.8.2(36)

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