VAT Gap: Greece Lost 5 Bln Euros in Uncollected VAT Revenue



     

     

    Money Laundering

    Research shows that the overall difference between the expected VAT revenue and the amount actually collected (the so-called ‘VAT Gap’) amounted to an unacceptable high yearly figure worth 5 billion euros. Overall, the EU member states lose a total of 160 billion euros from uncollected VAT, findings that support recent calls by the European Commission to overhaul the EU’s VAT system to tackle fraud and make it more efficient.

    The figures are from 2014 with increases to contribution since then that may well have worsened the problems. Findings show:

    * Greece lost VAT contributions worth 4.926 billion euros in 2014 with takings at 12.67 billion euros rather than 17.6 billion. To see the importance of this amount it should be noted that the rescue package that had been agreed to with creditors in the framework of the first review was at 5.4 billion euros.

    * In 2014, Greece managed to restrict the VAT deficit that was at 6.3 billion euros in 2013 at 34 percent to 28 percent at 4.9 billion euros in 2014. Despite this, Greece’s performance was the fifth worst in the EU28 – triple the EU average.

    The EU VAT Gap rate ranged from 37.9 percent of uncollected VAT in Romania to a low of only 1.2 percent in Sweden. In absolute terms, the highest VAT Gap of 36.9 billion euros was recorded in Italy while Luxembourg had the lowest of €147 million.

    Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs said: “Our Member States are losing tens of billions of euros in uncollected VAT revenue. This is unacceptable. The current regime is woefully ill-equipped to deal with the problems of VAT fraud and miscalculations, and it’s clear that the numbers will not get better by themselves. Member States must now quickly agree on a definitive fraud-proof EU VAT system, as laid out by the Commission earlier this year. I therefore urge all of our Member States to have a frank and meaningful discussion in order to feed into next year’s proposals, so we can tackle this issue once and for all.”


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