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IFP: Slovakia lost €2.3 billion in uncollected VAT in 2010

Slovakia’s estimated losses from uncollected VAT amounted to €2.3 billion in 2010, equivalent to 3.5 percent of GDP, the Financial Policy Institute (IFP) of the Finance Ministry said on Wednesday, March 14.

Slovakia’s estimated losses from uncollected VAT amounted to €2.3 billion in 2010, equivalent to 3.5 percent of GDP, the Financial Policy Institute (IFP) of the Finance Ministry said on Wednesday, March 14.

This means that there was relative growth in losses linked to VAT collection. Overall losses in 2000-05 were stable at 18 percent of the originally projected figures. "Ever since 2006, the tax loss has gradually risen, to 35.9 percent in 2010," reads the IFP material, as quoted by the TASR newswire. The reduced efficiency of VAT tax collection can also be seen in international comparisons, as the deviation from the EU average reached 1.6 percent of GDP in 2009, amounting to 1.2-percent of GDP growth in comparison with 2005.

"In other words, if we had enjoyed the same efficiency in tax collection processes on the level of the EU average, the basic VAT rate could have been 4.7 percentage points lower while maintaining the current VAT income," said the institute. The tax authorities are currently able to identify only 30 percent of incidences of VAT-evasion.

Source: TASR

Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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