Advanced Search
MyIDEAS: Login to save this paper or follow this series

VAT Fraud and Evasion

Contents:

Author Info

  • Stephen C. Smith
  • Michael Keen

Abstract

Like any tax, the VAT is vulnerable to evasion and fraud. But its credit and refund mechanism does offer unique opportunities for abuse, and this has recently become an urgent concern in the European Union (EU). This paper describes the main forms of noncompliance distinctive to a VAT, considers how they can be addressed, and assesses evidence on their extent in high-income countries. While the practical significance of current difficulties in the EU should not be over-stated, administrative measures alone may prove insufficient to deal with them, and a fundamental redesign of the VAT treatment of intra-community trade required. The current difficulties in the EU largely reflect circumstances that would not apply in the United States.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=20215
Download Restriction: no

Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 07/31.

as in new window
Length: 33
Date of creation: 01 Feb 2007
Date of revision:
Handle: RePEc:imf:imfwpa:07/31

Contact details of provider:
Postal: International Monetary Fund, Washington, DC USA
Phone: (202) 623-7000
Fax: (202) 623-4661
Email:
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC

Order Information:
Web: http://www.imf.org/external/pubs/pubs/ord_info.htm

Related research

Keywords: Value added tax; Sales taxes; vat; vat revenue; sales tax; vat rate; vat receipts; commodity taxation; international tax; tax authorities; tax system; vat compliance; indirect tax; press; uniform tax; tax sales; personal income tax; vat system; indirect taxation; internal revenue; tax liability; retail sales tax; optimal tax; tax administrations; checking; income taxes; indirect taxes; tax payments; email; sales taxation; earned income tax credit; tax journal; tax enforcement; tax avoidance; national tax journal; designing vat; penalties for late payment; foreign tax; tax design; value added taxes; national tax association; individual income tax; general taxation; export tax; broadcast; input tax credit; tax recovery; tax mix; rate of tax; raising tax revenue; provincial sales taxes; optimal taxation; tax evasion; tax differentiation; tax measures;

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Agha, Ali & Haughton, Jonathan, 1996. "Designing VAT Systems: Some Efficiency Considerations," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 303-08, May.
  2. Hans-Werner Sinn & Andrea Gebauer & Rüdiger Parsche, 2004. "The Ifo Institute’s Model for Reducing VAT Fraud: Payment First, Refund Later," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, Ifo Institute for Economic Research at the University of Munich, vol. 5(2), pages 30-34, October.
  3. Graham Harrison & Russell Krelove, 2005. "VAT Refunds," IMF Working Papers 05/218, International Monetary Fund.
  4. Keen, Michael & Mintz, Jack, 2004. "The optimal threshold for a value-added tax," Journal of Public Economics, Elsevier, Elsevier, vol. 88(3-4), pages 559-576, March.
  5. Joel Slemrod, 2007. "Cheating Ourselves: The Economics of Tax Evasion," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 21(1), pages 25-48, Winter.
  6. Kent Matthews, 2003. "VAT Evasion and VAT Avoidance: Is there a European Laffer curve for VAT?," International Review of Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 17(1), pages 105-114.
Full references (including those not matched with items on IDEAS)

Citations

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

Cited by:
  1. Jonathan Goyette, 2012. "Optimal tax threshold: the consequences on efficiency of official vs. effective enforcement," Cahiers de recherche, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke 12-07, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke.
  2. Ruud de Mooij & Michael Keen, 2012. ""Fiscal Devaluation" and Fiscal Consolidation: The VAT in Troubled Times," NBER Chapters, National Bureau of Economic Research, Inc, in: Fiscal Policy after the Financial Crisis, pages 443-485 National Bureau of Economic Research, Inc.
  3. Luca Barbone & Richard Bird & Jaime Vázquez Caro, 2012. "The Costs of VAT: A Review of the Literature," CASE Network Reports 0106, CASE-Center for Social and Economic Research.
  4. Goerke, Laszlo, 2011. "The optimal structure of commodity taxation in a monopoly with tax avoidance or evasion," University of Tuebingen Working Papers in Economics and Finance 8, University of Tuebingen, Faculty of Economics and Social Sciences.
  5. Athanasios O. Tagkalakis, 2013. "Audits and tax offenders: recent evidence from Greece," Working Papers, Bank of Greece 152, Bank of Greece.
  6. Michael Keen & Ruud A. de Mooij, 2012. "Fiscal Devaluation and Fiscal Consolidation," IMF Working Papers 12/85, International Monetary Fund.
  7. Besfamille, Martin & De Donder, Philippe & Lozachmeur, Jean-Marie, 2009. "The Political Economy of the (Weak) Enforcement of Sales Tax," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7108, C.E.P.R. Discussion Papers.
  8. Laszlo Goerke & Marco Runkel, 2007. "Tax Evasion and Competition," CESifo Working Paper Series 2104, CESifo Group Munich.
  9. Michael Keen, 2007. "VAT attacks!," International Tax and Public Finance, Springer, Springer, vol. 14(4), pages 365-381, August.
  10. Hashimzade, Nigar & Huang, Zhanyi & Myles, Gareth D., 2010. "Tax fraud by firms and optimal auditing," International Review of Law and Economics, Elsevier, Elsevier, vol. 30(1), pages 10-17, March.
  11. Fabrizio Borselli, 2011. "Organised VAT fraud: features, magnitude, policy perspectives," Questioni di Economia e Finanza (Occasional Papers), Bank of Italy, Economic Research and International Relations Area 106, Bank of Italy, Economic Research and International Relations Area.
  12. Robina Ather Ahmed & Mark Rider, 2008. "Pakistan’s Tax Gap: Estimates By Tax Calculation and Methodology," International Center for Public Policy Working Paper Series, at AYSPS, GSU, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University paper0811, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  13. Silvia Fedeli & Francesco Forte, 2012. "Border Tax Adjustment without Borders: The EU Carousel of VAT Fraud," Review of Economics & Finance, Better Advances Press, Canada, vol. 2, pages 55-70, November.
  14. International Monetary Fund, 2008. "Current and Proposed Non-Oil Tax System in Azerbaijan," IMF Working Papers 08/225, International Monetary Fund.
  15. Ben Lockwood & Michael Keen, 2007. "The Value-Added Tax," IMF Working Papers 07/183, International Monetary Fund.
  16. Silvia Fedeli & Francesco Forte, 2011. "EU VAT frauds," European Journal of Law and Economics, Springer, Springer, vol. 31(2), pages 143-166, April.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:07/31. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi).

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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