ASSESSMENT OF VAT FISCAL EFFICIENCY AS A CRITERION OF STATE BUDGET SUSTAINABILITY

Abstract

Introduction. VAT is the main budget-forming tax, the main component of the indirect tax system in Ukraine. The state budget of Ukraine receives more than 40% of all tax revenues from this tax. Therefore, the stability of the state budget and the proper financing of state expenditures depend on the level of fiscal efficiency of this tax. In order to monitor current and long-term changes in the fiscal efficiency (effectiveness) of VAT, it is common practice to measure the integral indicator of the tax gap. Purpose. The purpose of the article is to substantiate an analytical approach to assessing the size of the VAT tax gap as an additional element of a systematic analysis of the fiscal efficiency of the tax, which allows increasing the sustainability of the state budget. Methods. To assess the VAT tax gap, we used the «top-down» methodology, the essence of which is, based on actual macroeconomic data, to estimate the amount of potential tax revenues and compare it with actual tax revenues from VAT payments. Results. The fiscal efficiency of VAT, which is considered as an indicator of the tax gap, is studied. The tax gap is estimated for Ukraine based on available statistical data. It is shown that during the studied period, the greatest fiscal efficiency of VAT in Ukraine was recorded during 2016 2018. This is due to the introduction of a new tax administration practice, namely, the VAT electronic administration system. Global factor in reducing the VAT tax gap is the use of modern digital technologies for tax administration. The analytical approach to assessing the size of the VAT tax gap is complementary to the systematic analysis of the fiscal efficiency of the tax, which is based on determining the specific weight of VAT as a share of GDP at the macro level and tax efficiency at the level of enterprises or industries. Conclusion. It is concluded that supplementing the standard analytical approach with new data allows for a well-founded and rapid response to changes in trends in the real sector of the economy, and for making decisions in the field of administration in an operational manner, which should contribute to increasing the sustainability and balance of the state budget of Ukraine.