IDEAS home Printed from https://ideas.repec.org/a/aio/fpvfcf/v1y2021i23p37-45.html
   My bibliography  Save this article

The impact of corruption and poverty on VAT Gap in Central and Eastern Europe

Author

Listed:
  • Ionela BUTU

    (University of Economic Studies, Bucharest, Romania)

  • Petre BREZEANU

    (University of Economic Studies, Bucharest, Romania)

Abstract

According to the recent statement (December 2021) of the EU Commissioner for Economic Affairs - Paolo Gentiloni †Despite the positive trend registered in the last few years, the VAT Gap remains a major concern – particularly in view of the immense investment needs our Member States must address in the coming years†. VAT Gap is defined as the difference between the total theoretical VAT liability (VTTL) and VAT actually collected (VAT Revenue). Thus, as per the latest report of the European Commission (2021) within EU, in 2019, the VAT Gap reached around EUR 134 billion. Therefore, for the evaluation of the VAT Gap should be taken into account not only the economic context, but also the ethical, legal and other dimensions that affect the business environment, implicitly, society. More than 15 years after the great wave of enlargement of the European Union, the countries of Central and Eastern Europe are still facing several problems related to the functioning of the institutions. This article analyzes the impact of Corruption Perceptions Index (CPI) and People at risk of poverty or social exclusion (AROPE) on VAT Gap for Central and Eastern European countries. Our study covers 10 years (2009-2018), the period after the financial crisis. Within the study, we developed 3 econometric models, using panel data regression tested for fixed and random effects.

Suggested Citation

  • Ionela BUTU & Petre BREZEANU, 2021. "The impact of corruption and poverty on VAT Gap in Central and Eastern Europe," Finante - provocarile viitorului (Finance - Challenges of the Future), University of Craiova, Faculty of Economics and Business Administration, vol. 1(23), pages 37-45, November.
    • Handle: RePEc:aio:fpvfcf:v:1:y:2021:i:23:p:37-45
    as

    Download full text from publisher

    File URL: http://www.financejournal.ro/fisiere/revista/72937173905_Butu_Brezeanu%20EN.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Victor Ogneru & Stelian Stancu, 2022. "The impact of the VAT gap on the degree of taxation of an economy - analysis with panel data," Journal of Financial Studies, Institute of Financial Studies, vol. 12(7), pages 164-184, May.

    More about this item

    Keywords

    VAT evasion; VAT Gap; corruption; poverty; social exclusion;
    All these keywords.

    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • G1 - Financial Economics - - General Financial Markets
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aio:fpvfcf:v:1:y:2021:i:23:p:37-45. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alina Manta (email available below). General contact details of provider: https://edirc.repec.org/data/fecraro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.