ANALYSIS OF APPROACHES TO THE ASSESSMENT OF THE TAX GAP FOR VALUE ADDED TAX

Abstract

Value added tax is one of the most important sources of state budget replenishment both in Ukraine and in the world. VAT is one of the few indirect taxes for which taxpayers have developed a significant number of schemes and mechanisms to minimize their obligations. The existence of an effective, fair and effective regulatory framework for the functioning of VAT does not guarantee the completeness and timeliness of its payment. Quite often, the existence of a wide range of privileges and special conditions for charging this tax is used by taxpayers for the purpose of unjustified receipt of benefits. These features form the prerequisites for strengthening the control over the efficiency of the administration of accrual procedures and payment of VAT by the tax authorities, rather than on its regulatory support. The article is devoted to the study of the nature and features of the formation of tax breaks on value added tax. The object of the article is to analysis of existing practices for assessing the extent of the VAT gap. On the basis of the analysis of the existing theoretical and practical experience of the de-shadowing of the economy, systematization of approaches to the assessment of tax breaks has been carried out, their characteristic features have been determined. The analysis of the existing practices of assessing tax breaks on VAT showed that there is no unified approach to their assessment, the low level of approbation of the results obtained in Ukraine, the legislative settlement of issues of assessment and management of tax breaks at the level of legislative and executive authorities. The theoretical and methodological basis of the study are the fundamental principles of modern economic theory and state management, the current world experience in  assessing  tax gaps in the economy. According to the results of the analysis, it was concluded that it is advisable to investigate the problem of constant growth of the share of the shadow sector of the economy, due to the evasion of taxpayers' fulfillment of their tax obligations by assessing the volume of tax gaps. The results of the research may be useful for the authorities when developing measures to prevent tax evasion.  Results can be the basis for further research, in the context of determining the most effective instruments to counter tax evasion.