BRATISLAVA, December 22, (WEBNOVINY) — Effectiveness of VAT collection in Slovakia is lower than the European average and the country belongs among the five worst countries of the European Union in this regard. The effectiveness of VAT collection in Slovakia is 57.4 percent while the EU average is 72 percent, as indicated in a review of the evaluation of structural indicators published by the Finance Ministry’s Financial Policy Institute.
The VAT collection effectiveness in Slovakia plummeted between 2005 and 2009 by 13 percentage points. The fall belongs among the deepest in the bloc while most EU countries had lower VAT collection compared with 2005. In six of them the decrease was higher than 10 percentage points, said the institute.
Slovakia posted worse results in the effectiveness of VAT collection compared with its three neighbors. The Czech Republic has the highest effectiveness at 74 percent while both Hungary and Poland scored 70 percent.
The Financial Policy Institute says that Slovakia’s goal by 2020 should be to improve the effectiveness of VAT collection to 72 percent, which is the current EU average. The institute defined as well the risks that might thwart this goal, including a change of the legislation resulting in lower VAT collection, which would increase tax expenditures in VAT area, said the institute. VAT collection in Slovakia in 2010 was EUR 4.432 billion, up 15 percent y/y, according to the Tax Directorate data. Last year, the government revenue from VAT made up some 55 percent of total tax revenue.
SITA
