DOI: 10.11118/978-80-7509-990-7-0065

DIFFERENT INSIGHT INTO THE VAT GAP USING MIMIC MODEL

Iva Hasíková¹

¹ Department of Finance and Accounting, Faculty of Business and Economics, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic

The paper focuses on the estimation of the MIMIC model for quantification of VAT gap. MIMIC model is a specific type of structural equation models, which treats the VAT gap as a latent unmeasurable variable whose emergence and size are influenced by causes and whose presence is reflected in indicators; causes and indicators must be measurable. The contribution of this model is identification of causes of VAT gap, that are potential sources of VAT collection inefficiencies. The MIMIC model was built on data from selected European countries and according to the model VAT gap has these significant causes: openness of economy, corruption perception index, general government expenditure, final consumption and e-government development index. Developed using data from European countries, the model can be applied on each of these countries for quantification of VAT gap. These outputs can support the recommendations leading to improved efficiency of VAT collection.

Keywords: VAT gap, determinants of VAT gap, efficiency of VAT collection, MIMIC model, structural equation model

pages: 65-74, online: 2024