ECONOMY

Improvement in VAT collection

While Greece came top among European Union states in terms of improving its value-added tax deficit in 2012, it still ranks among those with the biggest problems in VAT collection.

According to data presented in a special report by the European Commission on VAT and the capacity for its collection, Greece showed a deficit of 6.6 billion euros in 2012, meaning it collected 6.6 billion euros less than what it should have based on the expected VAT revenues. A year earlier, however, the VAT deficit had stood at 9.1 billion euros, so according to the Commission the reduction recorded in 2012 was the biggest in the European Union.

“It appears that the strengthening of the effort to secure a response to VAT obligations has paid off, as the VAT deficit that had grown at a high rate since the start of the crisis declined by 5 percentage points in 2012 compared with 2011,” the Commission’s report notes.

In 2000 Greece’s VAT deficit amounted to 3.25 billion euros, which grew to 7.48 billion in 2009 and to 9.18 billion in 2011. The impact of the Greek economy’s deep recession in 2011 and 2012 was reflected in the reduction in expected VAT revenues, from 24.2 billion euros in 2011 to just 20.3 billion in 2012.

Despite that improvement in 2012, Greece remained among the countries with the highest VAT deficits as a percentage of expected revenues, amounting to 33 percent, from 38 percent in 2011.

This was the fifth highest in the EU in 2012, after Romania (44 percent), Slovakia (39 percent), Lithuania (36 percent) and Latvia (34 percent). Italy also had a 33 percent rate.

The Netherlands and Finland fared best with a 5 percent rate.