<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The policy led by a large number of developing countries, with the aim of increasing indirect taxes, has opened the issue of Value Added Tax (VAT) performance. Reforms of tax systems of transition countries generally involve an increase in standard rates in order to increase VAT, which is the main source of public revenues. In such a way, developing countries determine the VAT performance and the amount of revenue that could be collected by indirect taxation. Theoretical analyses of standard rates and other factors that have reflections on the VAT collection efficiency explicitly prove that there are different ways to improve the efficiency of VAT collection, and exclude an increase in the standard rate. An increase in the standard rate provides a balance of negative effects, which can be blurred by recorded tax revenues. The subject of this paper is an analysis of the factors that influence the efficiency of VAT collection in Serbia. The main objective of the paper is to examine the impact of the change in the standard rate, which is the result of the reforms carried out in 2012, on the performance of VAT. Regression analysis was applied to the data series for the period 2005-2016.The results show that the change in the standard rate had a statistically significant negative impact on VAT performance. Our analysis also indicates that the economic growth rate has reflections on VAT collection. A strong positive correlation between the economic growth rate and VAT performance was calculated.</p></abstract>

The policy led by a large number of developing countries, with the aim of increasing indirect taxes, has opened the issue of Value Added Tax (VAT) performance. Reforms of tax systems of transition countries generally involve an increase in standard rates in order to increase VAT, which is the main source of public revenues. In such a way, developing countries determine the VAT performance and the amount of revenue that could be collected by indirect taxation. Theoretical analyses of standard rates and other factors that have reflections on the VAT collection efficiency explicitly prove that there are different ways to improve the efficiency of VAT collection, and exclude an increase in the standard rate. An increase in the standard rate provides a balance of negative effects, which can be blurred by recorded tax revenues. The subject of this paper is an analysis of the factors that influence the efficiency of VAT collection in Serbia. The main objective of the paper is to examine the impact of the change in the standard rate, which is the result of the reforms carried out in 2012, on the performance of VAT. Regression analysis was applied to the data series for the period 2005-2016.The results show that the change in the standard rate had a statistically significant negative impact on VAT performance. Our analysis also indicates that the economic growth rate has reflections on VAT collection. A strong positive correlation between the economic growth rate and VAT performance was calculated.

Factors of the Value Added Tax Collection Efficiency in the Republic of Serbia

Economic Themes

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

{"article-title":"Factors of the Value Added Tax Collection Efficiency in the Republic of Serbia"}

The policy led by a large number of developing countries, with the aim of increasing indirect taxes, has opened the issue of Value Added Tax (VAT) performance....

Factors of the Value Added Tax Collection Efficiency in the Republic of Serbia

Published Online: May 04, 2020

Page range: 35 - 49

Received: Sep 02, 2018

Accepted: Nov 20, 2018

DOI: https://doi.org/10.2478/ethemes-2019-0003

Keywords
VAT, C-efficiency ratio, standard rate, economic growth rate, Serbia

© 2019 Milica Ristić et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Factors of the Value Added Tax Collection Efficiency in the Republic of Serbia

Published Online: May 04, 2020

Page range: 35 - 49

Received: Sep 02, 2018

Accepted: Nov 20, 2018

DOI: https://doi.org/10.2478/ethemes-2019-0003

KeywordsVAT, C-efficiency ratio, standard rate, economic growth rate, Serbia

© 2019 Milica Ristić et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
VAT, C-efficiency ratio, standard rate, economic growth rate, Serbia