THE VAT REVENUE LOSSES IN SLOVAKIA - THE FIGHT AGAINST TAX EVASION

The largest tax evasion that significantly affects public finance deficit in Slovakia is associated with value added tax. A success of fiscal consolidation and its sustainability will largely depend on increasing the efficiency of value added tax system and reducing VAT revenue losses. While in 2005 the total VAT revenue losses in Slovakia amounted to 1.7 % of GDP, in 2011 they reached 4 % of GDP which is the annual shortfall in tax revenues of 2.7 billion euros. Taking into account the estimated VAT revenue losses as well as the results of tax audits, the tax authorities in Slovakia identified only 18 % of tax evasion. So there is 80 % probability of not detecting tax evasion relating to VAT.