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18 Cent. Eur. Pub. Admin. Rev. 121 (2020)
Is VAT Administration System Efficient? The Case of the Czech Republic

handle is hein.journals/cepar18 and id is 353 raw text is: DOI: 10.17573/cepar.2020.2.06 Is VAT Administration System Efficient?' The case of the Czech Republic Hana Zidkova Prague University of Economics and Business, The Czech Republic hana.zidkova@vse.cz https://orcid.org/0000-0003-3661-6993 Tomas Vrana Prague University of Economics and Business, The Czech Republic vrat02@vse.cz https://orcid.org/0000-0002-4006-1794 Received: 13. 7. 2020 Accepted: 8. 10. 2020 ABSTRACT This paper is focused on the efficiency of VAT collection under the stand- ard 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 authori- ties 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 pro-duction and distribution chain and the difference between the average VAT rates applicable on final and intermediate consumption. Keywords: C-Coefficient, definitive VAT system, final consumption, intermediate consumption, reverse charge, VAT efficiency, collection efficiency, Czech Republic JEL: H21, H26 1 The paper was prepared as one of the outputs of a research project of the Faculty of Finance and Accounting at the University of Economics ~Economic and institutional aspects of public finance registered by the Internal Grant Agency of University of Economics, Prague under the registration number F1/7/2019 and it was also funded by the institutional support IP 100040 at the Faculty of Finance and Accounting at the University of Economics. Zidkovs, H., Vrsna, T. (2020). Is VAT Administration System EFficient? 121 The case oF the Czech Republic Central European Public Administration Review, 18(2), pp. 121-134 1.01 Original scientific article

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