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Slight decline in VAT evasion in 2005

Author

Listed:
  • Andrea Gebauer
  • Rüdiger Parsche

Abstract

In 2001 there was a surprising decline in VAT, which continued in the following years, evidently unrelated to economic developments. As a result, the Ifo Institute has closely examined the rate of VAT evasion by comparing actual with the theoretically possible revenue. The Ifo quantification shows that since 2001 no further major increase in the evasion rate occurred, having remained unchanged at 10%. For 2005 a slight improvement was registered for the first time in years. The value of the forecasted evasion rate is now 9½%. This could be an indication that recent legislative measures have been effective, albeit with a time lag, and have contributed to helping stabilize VAT revenue and to ending the disconnect with economic development.

Suggested Citation

  • Andrea Gebauer & Rüdiger Parsche, 2005. "Slight decline in VAT evasion in 2005," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 58(09), pages 12-13, May.
    • Handle: RePEc:ces:ifosdt:v:58:y:2005:i:09:p:12-13
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    File URL: https://www.ifo.de/DocDL/ifosd_2005_9_2.pdf
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    Cited by:

    1. Chang Woon Nam & Rüdiger Parsche, 2007. "In spite of the 19 percent VAT rate, a further drop in revenue shortfall is expected," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 60(10), pages 41-42, May.
    2. Rüdiger Parsche, 2008. "Despite increase in VAT rate to 19% in 2007, decline in revenue shortfall to 9% and an expected 9% for 2008," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 61(12), pages 55-56, June.

    More about this item

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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