Factors of the Value Added Tax Collection Efficiency in the Republic of Serbia

Ristić Milica (), Todorović Jadranka Đurović () and Đorđević Marina ()
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Ristić Milica: University of Niš, Faculty of Economics, Republic of Serbia
Todorović Jadranka Đurović: University of Niš, Faculty of Economics, Republic of Serbia
Đorđević Marina: University of Niš, Faculty of Economics, Republic of Serbia

Economic Themes, 2019, vol. 57, issue 1, 35-49

Abstract: The policy led by a large number of developing countries, with the aim of increasing indirect taxes, has opened the issue of Value Added Tax (VAT) performance. Reforms of tax systems of transition countries generally involve an increase in standard rates in order to increase VAT, which is the main source of public revenues. In such a way, developing countries determine the VAT performance and the amount of revenue that could be collected by indirect taxation. Theoretical analyses of standard rates and other factors that have reflections on the VAT collection efficiency explicitly prove that there are different ways to improve the efficiency of VAT collection, and exclude an increase in the standard rate. An increase in the standard rate provides a balance of negative effects, which can be blurred by recorded tax revenues. The subject of this paper is an analysis of the factors that influence the efficiency of VAT collection in Serbia. The main objective of the paper is to examine the impact of the change in the standard rate, which is the result of the reforms carried out in 2012, on the performance of VAT. Regression analysis was applied to the data series for the period 2005-2016.The results show that the change in the standard rate had a statistically significant negative impact on VAT performance. Our analysis also indicates that the economic growth rate has reflections on VAT collection. A strong positive correlation between the economic growth rate and VAT performance was calculated.

Keywords: VAT; C-efficiency ratio; standard rate; economic growth rate; Serbia (search for similar items in EconPapers)
JEL-codes: H20 H21 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:ecothe:v:57:y:2019:i:1:p:35-49:n:3

DOI: 10.2478/ethemes-2019-0003

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