Antena 3 CNN Business CE Report : Romania rated first in the EU on state losses from uncollected VAT

CE Report : Romania rated first in the EU on state losses from uncollected VAT

CE Report : Romania rated first in the EU on state losses from uncollected VAT
20 Sep 2013   •   17:49

Romania is in the lead with the largest losses from uncollected VAT to GDP of over 10 billion Euros, a European Commission report for 2011, published on Thursday said, Agerpres informs.

Our country is followed by Latvia, Greece and Lithuania , who in 2011 were the countries registering the heights losses from uncollected VAT relative to GDP, says a European Commission report released Thursday.

Uncollected VAT represents the difference between the expected revenue from VAT and the revenues that were actually collected by national authorities. 

At EU level, the states with the largest losses from uncollected VAT to GDP in 2011 were: Romania with 10.348 billion Euros (7.9% of GDP), Greece, with 9.763 billion Euros (4.7% of GDP), Lithuania, to 1.352 billion Euros (4.4% of GDP), Latvia, with 954 million Euros (4.7% of GDP).

At EU level, the amounts from uncollected VAT to PIB amounts to 192,957 billion Euros (1,5% din PIB). 

According to the European commissioner Algirdas Emet, the level of uncollected VAT is unacceptable , especially given the impact that such amounts could have in supporting public finances.

"The amount of VAT that is slipping through the net is unacceptable, particularly given the impact such sums could have in bolstering public finances," said EU Commissioner for Taxation Algirdas Semeta. "However, there is also a positive message to be drawn from today's findings. Our ambitious reform of the VAT system, the EU measures to combat tax evasion and our recommendations for national tax reforms, are all targeted in the right direction. We know the problem; we have identified solutions to it, and now it's time for member states to act. Today's figures will serve as a baseline to assess their progress in improving VAT compliance in the years ahead.”

The European Commission considers that it is essential, first of all, to take a tougher approach to the fight against tax evasion and stronger legal actions at national level.

The VAT reform, launched in December 2011, has already provided important tools for ensuring better protection against VAT fraud. For example, the Rapid Reaction Mechanism, adopted in July 2013, will allow Member States to react more promptly and effectively in cases of VAT fraud. Eurofisc, launched in 2010 facilitates for a stronger cooperation and coordination between Member States to combat organized fraud relating to VAT..

Secondly, the simpler the system, the easier it is for taxpayers to comply with regulations. Therefore, the European Commission strives to make the VAT system easier for businesses across Europe. Furthermore, new measures to facilitate electronic invoicing and special provisions for small businesses came into force at the beginning of the year and a EU standard VAT declaration will be proposed in the upcoming weeks.

Finally, Member States need to reform their national tax systems in a way that facilitates the collection of taxes, to discourage tax evasion and avoidance of payments and improve the efficiency of tax collection. Commission issued specific recommendations to Member States and the Thursday report suggests that a complicated taxing system may contribute to poor collection. Therefore, the Commission has repeatedly urged Member States to broaden national tax bases and limit exemptions and tax reductions to allow Member States to avoid raising the standard rate of VAT.

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