Grzegorz Poniatowski attends VAT Forum in Prague

Grzegorz Poniatowski, the Director of Fiscal Policy Studies at CASE, took part in a conference on VAT reform in the European Union, held in Prague at the end of January.

During his presentation, Dr. Poniatowski discussed the problem of VAT non-collection in EU countries, elements of the VAT gap and the reasons why this tax is not fully collected. “Loss of VAT revenues is caused not only by criminal activity, but to a large degree by other factors, such as tax optimization, the gray economy and bankruptcies,” Dr. Poniatowski said during his presentation. “It is estimated that the scale of missing-trader fraud, used for VAT fraud in intra-community transactions, constitutes 10% to 40% of the VAT gap in EU countries.”

Dr. Poniatowski, author of a report on the VAT gap in EU countries commissioned by the European Union, also stressed that the VAT gap in the EU in 2015 was 12.8%, falling below its 2001 level for the first time.

Last year the European Commission presented a plan for the largest reform of EU VAT regulations in the past 25 years. This initiative is meant to improve and modernize the system, with benefits both for public administration and for companies.

The conference was organized by the Chamber of Tax Advisers of the Czech Republic (KDCPR) and the Prague University of Economics.

Conference participants’ presentations can be viewed here.