Issue 9 - Volume 64/2016
What Causes the VAT Gap?
Page 811, Issue 9 - Volume 64/2016
This paper is focused on the possible factors influencing the value added tax (VAT) gap. The VAT gap is an estimate of unpaid VAT in the economy calculated as the difference between the theoretical VAT liability and VAT actually paid into the state budget. It is often expressed in relative terms as a percentage of unpaid VAT from the theoretical VAT that would be collected if all taxpayers report and pay VAT in full. The high value of this indicator may imply problems with tax evasion and inefficiency within the tax system. The article summarises the existing studies quantifying the VAT gap and seeking to identify the relationship between the VAT gap or VAT revenues and various economic, tax and social factors present in individual countries. The panel regression and pooled regression models were used in this paper to identify the statistically significant variables that have an impact on the VAT gap. From 21 variables, only four factors proved to be statistically significant. The analysis revealed that the increase in the ratio of VAT revenues to GDP causes a reduction in the VAT gap. Further findings were that if the standard VAT rate and the difference between the standard and reduced VAT rate are increasing, the VAT gap grows. Finally, the control variable – share of household consumption in GDP is increasing the VAT gap.
Keywords: tax evasion, VAT gap, determinants of VAT gap, theoretical VAT liability
JEL Classification: H26
Evaluation of GDP Growth Forecasts: Does Using Different Data Vintages Matter?
Page 827, Issue 9 - Volume 64/2016
This paper deals with effect of different real-time data vintages (recent and first outturn) on accuracy of real GDP growth forecasts produced by main Czech and Slovak public authorities (ministries of finance, central banks). Firstly, variation in the real-time data itself was analysed, along with of multidimensional forecasting error evaluation (MAE, RMSE, MASE measures). Then, battery of statistical tests was applied in order to determine, whether the switch from first to recent real-time data affects forecasts´ accuracy in a significant manner (Wilcoxon Signed Rank test, Sign test) and whether it affects relative accuracy between individual institutions (Kruskal-Wallis test, Mann-Whitney U test). Our results show that while the change in underlying data affects forecasting accuracy in our sample (using recent data lead to higher errors), the changes were neither found statistically significant in strong majority of surveyed cases, nor affected the relative accuracy of involved institutions.
Keywords: GDP, forecasting, forecast evaluation, data vintages
JEL Classification: E27, C53, E01, E62
Risk Attitude Elicitation Methods: Do They Tell Similar Stories?
Page 847, Issue 9 - Volume 64/2016
We focus on the comparison of risk attitudes elicited through three different procedures with the goal to analyse the consistency of risk attitudes. Rank correlations are utilized to measure the degree of association of the subjects’ choices and principal component analysis is employed to find the main factors describing the specific characteristics of risk attributes. We observe patterns of consistency in risk attitudes between two methods and within the selected multidimensional method, too. We find an evidence that gender and subjects’ cognitive abilities play a certain role in the consistency of risk attitudes. Participants’ choices in popular Holt and Laury method and the other two methods show nearly no relation. The principal component analysis supports the validity of the distinctive nature of the three risk elicitation methods. We also identify another aspect which is common in the different risk context; we call it the payoff risk sensitivity.
Keywords: risk attitudes, preference elicitation
JEL Classification: G02, C81, C91
Calculation of the Capital Requirement Using the Monte Carlo Simulation for Non-life Insurance
Page 878, Issue 9 - Volume 64/2016
The aim of the paper is to demonstrate the possibility of using the Monte Carlo method within the field of risk reduction within the framework of a developed model by applying a particular form of insurance. It is focused on the area of non-life insurance in which the collective risk model is suitable for describing the total claims in a given portfolio of insurance contracts. The Monte Carlo simulation method is the starting point, from which one can generate values of the total claim amount and their statistical treatment for the needs of measuring the value of the capital required to ensure solvency. As a final result the paper presents simulations as an effective problem solving tool, by enabling the development of interactive studies in the risk management process. The methodology presented makes use of Visual Basic for Applications under Microsoft Excel. This opens up the potential of developing actuarial software for solving risk reduction problems by applying various forms of insurance. Given the ability of the method to react flexibly to changes in the given form of insurance or its parameters it can be used also to optimise the choice of suitable scenarios.
Keywords: Monte Carlo simulation, types of insurance, Solvency II, solvency capital requirement, internal model
JEL Classification: G22, C63
The Impact of Single Taxes on the Convergence of Taxation in the European Union
Page 894, Issue 9 - Volume 64/2016
The European Union, as a result of original purely economic-oriented cooperation, cooperates in a number of areas including tax policy area. This paper results from works pointing out a tax convergence in the EU. The aim is to quantify the impact of single taxes and tax competition on the convergence of taxation in the EU. Panel regression with fixed-effects for the EU-28 countries between the years 1965 – 2011 is used. Two models report a statistically significant positive impact of all components but the most important determinants are tax competition and property taxes. All models meet diagnostic tests and are econometrically robust.
Keywords: taxes, convergence, European Union, tax burden, tax mix, tax competition
JEL Classification: H20