EU: Estimated losses from uncollected VAT revenues totalled 152 billion in 2015 in all member-states

An estimated 152 billion euros in uncollected VAT revenues was lost in 2015, according to a report by the European Commission released on Thursday.

The report is published every year by the European Union and sets out the difference between the amount of VAT due and the amount actually collected (“VAT Gap”).

In Greece, uncollected VAT revenues for 2015 were estimated at 5 billion euros for 2015, placing Greece among the top three countries with the highest VAT Gap in terms of percentage in the EU (28.3%), after Romania (37.2%) and Slovakia (29.4%).

The report said that in 2015, real GDP in Greece continued to shrank by almost 10% since 2011. In order to strengthen the revenues for July 2015, VAT rates were increased in various services and resulted in an additional taxation burden around 1 billion euros. Real revenues, however, increased only by 200 million euros, thus widening the gap by three percentage points, from 25% to 28%.

The EU countries with the lowest VAT Gaps were Spain (3.5%) and Croatia (3.9%). In absolute terms, the highest gap for 2015 was recorded in Italy, with about 35 billion euros. Most countries registered a gap shrinking, with greatest improvement shown by Malta, Romania and Spain. A slight widening was registered in Belgium, Denmark, Greece, Ireland, Luxembourg, Finland and the United Kingdom.

The Commission warned that EU member-states should not allow such a high loss in revenue from VAT, so they may be able to make full use of such revenues in their budgets. The Commission supports efforts to improve the collection of VAT throughout the EU but faces the problem of outdated inter-state VAT regulations, which dated to 1993, said Commissioner for Economic and Financial Affairs Pierre Moscovici.