Abstract
"The European Union Member States use different organizational and functional models of tax administration that could determine better or worse performances. This paper analyzes the way of organization and operation of tax administrations in European Union Member States from the perspective of the 21 variables obtained based on the information made available on the OECD’s Tax Administration Comparative Information Series. Using the hierarchical clustering procedures, tax administrations in the European Union Member States were grouped into clusters. The purpose of this approach was to observe if the respective clusters can be associated with a certain grouping of the tax administrations, made according to their classification, from the point of view concerning the activity efficiency. The efficiency of the activity was evaluated based on 5 indicators developed in the specialty literature. The research showed that the tax administrations in the formed clusters can be found in one of the ranking parts. Therefore, the grouping of tax administrations based on variables that reflect their characteristics can be a useful tool in identifying an organization and functioning model for the tax administration that associated with a certain efficiency level."
Highlights
Tax administration (TA) is the public institution with the most important role in collecting tax revenue
This research aims at grouping the TAs of the 28 European Union Member States (EU MS) by cluster analysis, using data provided by the OECD (Tax Administration 2019 Comparative Information on the OECD and Other Advanced and Emerging Economies) in order to highlight if a certain pattern of organization and functioning of TAs can be associated with the high TA performance
The flexible use of the staff whose competence was largely limited to a certain tax or the useless fragmentation of the tax system is the disadvantage of a tax type, or the impossibility of taking into account the different characteristics, behaviors and attitudes of taxpayers in relation to tax compliance is a disadvantage of the function tax
Summary
Tax administration (TA) is the public institution with the most important role in collecting tax revenue. TA is required to use adequate tools and to apply modern methods for tax planning, tax collection, in such a way that tax revenue collection and compliance of taxpayers with their tax obligations should be as high as possible. Current neo-liberal policies have generated a reduction in tax pressure and require the state to use public money much more rationally and efficiently. Within this context, the pressure exercised on the TA to achieve a tax revenue collection, as high as possible, grows. The above-mentioned aspects can be seen in the policies and strategies promoted by the International Monetary Fund, the World Bank, the Organization for Economic Co-operation and Development (OECD), etc
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