EU VAT gap at £168bn, says recent study

VAT revenue collection across the EU showed no significant improvement between 2012 and 2013 according to the latest figures, which estimate the EU ‘VAT gap’ at €168bn. This equates to 15.2% of revenue loss due to fraud and evasion, tax avoidance, bankruptcies, financial insolvencies and miscalculation in 26 member states.

Pierre Moscovici, EC commissioner for economic and financial affairs, taxation and customs said: ‘This important study highlights once again the need for further reform in VAT collection systems across the EU. I urge member states to take the steps needed to fight tax evasion and tax fraud at all levels. This remains a burning issue and is at the top of this Commission’s agenda.’

The VAT gap study is funded by the Commission as part of its work to reform the VAT system in Europe and to clamp down on tax fraud and evasion. The Commission has already identified key actions and taken a number of measures to assist member states to this effect. For full report, see www.bit.ly/1g52Yim.