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Analysis of the Decisive Factors of the VAT Gap


  • Radu CIOBANU

    (Bucharest University of Economic Studies)

  • Adriana Florina POPA

    (Bucharest University of Economic Studies)

  • Daniela-Nicoleta SAHLIAN

    (Bucharest University of Economic Studies)


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.

Suggested Citation

  • Radu CIOBANU & Adriana Florina POPA & Daniela-Nicoleta SAHLIAN, 2023. "Analysis of the Decisive Factors of the VAT Gap," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 4(1), pages 50-57, January.
  • Handle: RePEc:ahd:journl:v:4:y:2023:i:1:p:50-57
    DOI: 10.37945/cbr.2023.01.06

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    References listed on IDEAS

    1. Grzegorz Poniatowski & Adam Åšmietanka & Mikhail Bonch-Osmolovskiy, 2020. "Study and Reports on the VAT Gap in the EU-28 Member States: 2020 Final Report," CASE Reports 0503, CASE-Center for Social and Economic Research.
    2. Joshua Aizenman & Yothin Jinjarak, 2008. "The collection efficiency of the Value Added Tax: Theory and international evidence," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 17(3), pages 391-410.
    3. Keen, Michael & Smith, Stephen, 2006. "VAT Fraud and Evasion: What Do We Know and What Can Be Done?," National Tax Journal, National Tax Association;National Tax Journal, vol. 59(4), pages 861-887, December.
    4. Grzegorz Poniatowski & Mikhail Bonch-Osmolovskiy & Misha V. Belkindas, 2017. "Study and Reports on the VAT Gap in the EU-28 Member States: 2017 Final Report," CASE Reports 0492, CASE-Center for Social and Economic Research.
    5. Sokolovska, Olena, 2016. "Cross-border VAT frauds and measures to tackle them," MPRA Paper 70504, University Library of Munich, Germany.
    6. Sokolovska, Olena & Sokolovskyi, Dmytro, 2015. "VAT efficiency in the countries worldwide," MPRA Paper 66422, University Library of Munich, Germany.
    7. Hana Zídková, 2014. "Determinants of VAT Gap in EU," Prague Economic Papers, Prague University of Economics and Business, vol. 2014(4), pages 514-530.
    8. Manuel Bonucchi & Monica Ferrari & Stefania Tomasini & Tsvetomira Tsenova, 2015. "Tax policy, investment decisions and economic growth," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(5), pages 225-262.
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    More about this item


    VAT; VAT gap; collection deficits; tax fraud; tax evasion;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models


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