Dissertation committee:
1. Ηρειώτης Νικόλαος, Καθηγητής, ΕΚΠΑ - Τμήμα Διοίκησης Επιχειρήσεων και Οργανισμών (Επιβλέπων),
2. Βασιλείου Δημήτριος, Καθηγητής, ΕΚΠΑ - Τμήμα Οικονομικών Επιστημών (Τριμέλης),
3. Αλεξάκης Παναγιώτης, Καθηγητής, ΕΚΠΑ - Τμήμα Διοίκησης Επιχειρήσεων και Οργανισμών (Τριμελής),
4. Κώτσιος Στυλιανός, Καθηγητής, ΕΚΠΑ - Τμήμα Οικονομικών Επιστημών (Επταμελής),
5. Μπάλιος Δημήτριος, Αναπληρωτής Καθηγητής, ΕΚΠΑ - Τμήμα Οικονομικών Επιστημών (Επταμελής),
6. Γκούμας Σπυρίδων, Καθηγητής, ΠΑΔΑ, Τμήμα Λογιστικής και Χρηματοοικονομικής (Επταμελής),
7. Καλαντώνης Πέτρος, Καθηγητής, ΠΑΔΑ, Τμήμα Διοίκησης Τουρισμού (Επταμελής).
Summary:
The Value Added Tax (VAT) Gap is an important as well as a comprehensive indicator of tax evasion, tax avoidance and any other existing malfunctions related to Tax Administration. Having taken into account that the Greek Economy’s VAT Gap is among the top five gaps in the European Union throughout the entire investigated period (1997-2018), the quantification and in-depth study of the Greek VAT Gap was attempted, including an investigation of the factors that affect it.
Through the review of all relevant international literature, the main economic, social and tax factors that may affect the VAT Gap of the Greek Economy were approached as realistically and objectively as possible. Although there is extensive international research, in Greece there are no corresponding studies that focus specifically on the VAT Gap, especially when considering Tax Administration activities. This thesis not only focuses on the Greek VAT Gap but also incorporates these activities into the study, recognizing the decisive contribution it could have in reducing the Gap.
Based on the available literature and the particularities of the Greek economy and Greek tax system as mentioned above, a total of twelve explanatory (12) variables were examined with the use of time-series econometric models. The time period under study extends from 1997 to 2018 (a total of twenty-two years), for which all data for the variables under consideration were available. This fact allowed for an in-depth analysis of changes in the Greek VAT system, whether it was modifications in VAT rates or legislative changes, focusing at the same time on the effects of the 2007 – 2008 financial crisis.
Afterwards, the Greek VAT Gap was broken down into its two main components, known as the Compliance Gap and the Policy Gap in order to better evaluate the effect each of the selected factors may have on the Gap. For this purpose, a proxy variable was selected as the dependent variable of the model instead of the actual VAT Gap, specifically the VAT Revenue Ratio (VRR). After constructing a multiple linear regression model and estimating it using the Ordinary Least Squares (OLS) method and conducting all necessary tests, a total of five (5) variables were found to be statistically significant. Two of them, namely, the ratio of VAT to total taxes and the number of precautionary tax audits carried out, were negatively correlated with the Greek VAT Gap. The other three variables, which showed a positive correlation with the Greek VAT Gap, are final government consumption expenditure, the difference of the normal VAT rate from the reduced rates and the added value of the Greek Economy.
Prompted by the model’s findings on the added-value-of-the-Greek-Economy variable, we proceeded to build a secondary model to further investigate and analyze each of the individual economic sectors that may affect the Greek VAT Gap. This secondary econometric study was carried out based on the same multiple linear regression model using OLS, with the only difference being that the explanatory variables now were the fifteen (15) economic activity sectors in the Greek economy, while the VRR remained as the dependent variable. The results showed that four (4) sectors of the Greek Economy affect the Greek VAT Gap, the first being the manufacturing sector, which negatively affects it (when the size of the sector increases the VAT Gap is reduced), whereas the Public Administration sector, the Catering and Accommodation sector and the Agricultural sector have a positive impact on the Gap.
In addition to the two econometric models we built, the relationship between the VAT Gap and the MOSS (Mini One Stop Shop) legislation was investigated separately. The MOSS legislation has been in force since 01.01.2015 and from 01.07.2021 it has been expanded to most e-commerce services, however its impact on the VAT Gap has not yet been studied both in Greece and the EU. Based on our findings, there was no significant effect from the application of the MOSS legislation on the Greek VAT Gap during the 1997 – 2018 period under investigation, without however, diminishing the legislation’s overall value, as mentioned in the relevant section of our conclusions.
Lastly, we evaluated all key findings that emerged from our research, formulating proposals for limiting the Greek VAT Gap, which can be used by policymakers and especially by the Greek Tax Administration in the fight against tax evasion and non-compliance.
In conclusion, the importance of this thesis lies in the enrichment of the existing literature regarding the Greek VAT Gap, as well as the presentation of relevant data and the formulation of proposals for battling and limiting the Greek VAT Gap.
Keywords:
Value Added Tax (VAT), VAT Gap, VAT Revenue Ratio (VRR), Tax Administration, Tax Audits, Economic Sectors, Mini One Stop Shop (MOSS).
