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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

Tomas  Vrana
Prague University of Economics and Business, The Czech Republic

Received: 13. 7. 2020
Accepted: 8. 10. 2020

   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

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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