Is VAT Administration System Efficient? The Case of the Czech
This paper is focused on the efficiency of VAT collection under the standard credit invoice method. It discusses several approaches on how to evaluate the efficiency of the VAT system. The authors create their own indicator called the C-Coefficient that determines how many times must one unit of c...
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| Format: | Article |
| Language: | English |
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University of Ljubljana Press (Založba Univerze v Ljubljani)
2020-11-01
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| Series: | Central European Public Administration Review |
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| Online Access: | https://journals.uni-lj.si/CEPAR/article/view/20580 |
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| author | Hana Zídková Tomáš Vrána |
| author_facet | Hana Zídková Tomáš Vrána |
| author_sort | Hana Zídková |
| collection | DOAJ |
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This paper is focused on the efficiency of VAT collection under the standard credit invoice method. It discusses several approaches on how to evaluate the efficiency of the VAT system. The authors create their own indicator called the C-Coefficient that determines how many times must one unit of currency be checked by the financial authority to collect it into public budgets. The C-Coefficient is calculated from the data on VAT revenues and total VAT paid on all taxable supplies performed in the economy. The concrete results are shown for the Czech Republic for the period 2005 to 2018. The C-Coefficient reaches the values between 7.92 and 11.56, meaning that in the most efficient year (2018) the tax authorities had to inspect each collected CZK more than 7 times, whereas in the least efficient year (2008) they had to audit each collected CZK more than 11 times. Authors also discuss what influences the C-Coefficient. Among important factors are measures against VAT fraud, especially the specific reverse charge, as well as the number of VAT payers in the production and distribution chain and the difference between the average VAT rates applicable on final and intermediate consumption.
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| format | Article |
| id | doaj-art-79afe564b9724f7ba2d0115e3982d70f |
| institution | Kabale University |
| issn | 2591-2240 2591-2259 |
| language | English |
| publishDate | 2020-11-01 |
| publisher | University of Ljubljana Press (Založba Univerze v Ljubljani) |
| record_format | Article |
| series | Central European Public Administration Review |
| spelling | doaj-art-79afe564b9724f7ba2d0115e3982d70f2025-01-22T10:50:32ZengUniversity of Ljubljana Press (Založba Univerze v Ljubljani)Central European Public Administration Review2591-22402591-22592020-11-0118210.17573/cepar.2020.2.06Is VAT Administration System Efficient? The Case of the CzechHana Zídková0https://orcid.org/0000-0003-3661-6993Tomáš Vrána1https://orcid.org/0000-0002-4006-1794Prague University of Economics and Business, The Czech RepublicPrague University of Economics and Business, The Czech Republic This paper is focused on the efficiency of VAT collection under the standard credit invoice method. It discusses several approaches on how to evaluate the efficiency of the VAT system. The authors create their own indicator called the C-Coefficient that determines how many times must one unit of currency be checked by the financial authority to collect it into public budgets. The C-Coefficient is calculated from the data on VAT revenues and total VAT paid on all taxable supplies performed in the economy. The concrete results are shown for the Czech Republic for the period 2005 to 2018. The C-Coefficient reaches the values between 7.92 and 11.56, meaning that in the most efficient year (2018) the tax authorities had to inspect each collected CZK more than 7 times, whereas in the least efficient year (2008) they had to audit each collected CZK more than 11 times. Authors also discuss what influences the C-Coefficient. Among important factors are measures against VAT fraud, especially the specific reverse charge, as well as the number of VAT payers in the production and distribution chain and the difference between the average VAT rates applicable on final and intermediate consumption. https://journals.uni-lj.si/CEPAR/article/view/20580C-Coefficient, definitive VAT system, final consumption, intermediate consumption, reverse charge, VAT efficiency, collection efficiency, Czech Republic |
| spellingShingle | Hana Zídková Tomáš Vrána Is VAT Administration System Efficient? The Case of the Czech Central European Public Administration Review C-Coefficient, definitive VAT system, final consumption, intermediate consumption, reverse charge, VAT efficiency, collection efficiency, Czech Republic |
| title | Is VAT Administration System Efficient? The Case of the Czech |
| title_full | Is VAT Administration System Efficient? The Case of the Czech |
| title_fullStr | Is VAT Administration System Efficient? The Case of the Czech |
| title_full_unstemmed | Is VAT Administration System Efficient? The Case of the Czech |
| title_short | Is VAT Administration System Efficient? The Case of the Czech |
| title_sort | is vat administration system efficient the case of the czech |
| topic | C-Coefficient, definitive VAT system, final consumption, intermediate consumption, reverse charge, VAT efficiency, collection efficiency, Czech Republic |
| url | https://journals.uni-lj.si/CEPAR/article/view/20580 |
| work_keys_str_mv | AT hanazidkova isvatadministrationsystemefficientthecaseoftheczech AT tomasvrana isvatadministrationsystemefficientthecaseoftheczech |