Authors: Spyros Papadakis

Title: DETERMINANTS OF THE VAT GAP IN THE GREEK ECONOMY

Abstract

The present study focuses on the Value Added Tax (VAT) non-compliance in the Greek Economy and the role of key economic and tax variables associated with it. In particular the author seeks to investigate what variables affect the Greek VAT Gap, i.e. the difference between expected VAT revenues and VAT actually collected, through the application of an econometric model fit specifically for the Greek Economy.

In this respect, a wide variety of variables that were previously examined in international literature were selected. It must be noted that despite the existence of similar studies internationally, something similar has not happened in Greece. Also, we seek to investigate the effect that tax audits and fines have on the vat gap. Of all the variables examined regarding their relationship to the VAT gap for the period between 1995 and 2017, only some of them were found to be statistically significant.

Regarding the estimation of the above-mentioned factors, annual data from 1995 to 2017 were collected and analyzed using LSE regressions and time series models.