The Romanian state lost RON 29.3 billion (EUR 6.4 bln) in 2017 due to non-collection of revenues representing value added tax (VAT), according to a report published by the European Commission on September 5.

The VAT not collected by the Government (VAT gap, essentially generated by VAT frauds or inadequate tax collection) accounted for 3.4% of the country’s GDP in 2017, when the budget deficit was 2.8% of GDP.

The VAT gap accounted for 36% of the total VAT revenues Eurostat estimates that Romania should have collected in 2017, the highest share among the EU countries. Romania was followed by Greece (34%) and Lithuania (25%). The smallest VAT gaps were in Sweden, Luxembourg and Cyprus, where only roughly 1% of the potential VAT was not collected.

In absolute terms, Italy registered the largest VAT gap, of EUR 33.5 billion.

editor@romania-insider.com

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