Abstract
The value added tax is an important part of revenues of the European Union and its Member States. The aim of the paper is to statistically analyse the extent of positive impact of selected legislative measures introduced in the fight against tax evasion and discuss subsequently the sustainability of the current value added tax system in the European context. The analysis was conducted for the Czech and Slovak Republics, two traditionally strong trading partners, and for an important commodity, copper. In the analysis, regression methods applied to official time series data on copper export from the Czech Republic to Slovakia were employed together with appropriate statistical tests to detect potential significance of the new legislative tools, the value added tax control statement and reverse charge mechanism. Moreover, the study considers fundamental economic factors that affect foreign trade in parallel. Based on the analysis, there is sound evidence that the major historical turnaround experienced by the time series took place due to the then forthcoming legislative measures that were to restrain the possibility of carousel frauds. The results confirm the positive impact of the measures and also suggest the necessity of more systematic changes in the tax system.
Highlights
The main role of taxes in economy is to secure income for public budgets [1]
The authors of the paper are concerned with the possibility that there may have been a factor at work in the form of an intervention that occurred in a short period of time, but had had a lasting effect, given how the series on copper export from the Czech Republic to Slovakia developed
This may concern the intervention induced by the measure that was introduced in Slovakia in 2014 in the form of the value added tax (VAT) control statement
Summary
The main role of taxes in economy is to secure income for public budgets [1]. Schratzenstaller [2] emphasizes that an economically sustainable tax system should generate sufficient revenues to finance government activities. VAT reduces marginal costs of public funds and increases the tax ratio This way it becomes a very effective tool for most of the countries that adopted it [5]. Research results produced by Zimmermannová, Skalicková, and Široký [6], which are fit for the conditions prevailing in the Czech Republic, show that there is a statistically significant and positive relationship between the regional VAT revenues and the regional GDP. This finding can help policy makers improve their economic planning and management on regional and national levels.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
