{"id":11278,"date":"2024-03-21T12:56:23","date_gmt":"2024-03-21T11:56:23","guid":{"rendered":"http:\/\/webecpol.esade.edu\/publicaciones\/did-tax-fraud-and-the-shadow-economy-decline-in-the-aftermath-of-the-pandemic-analysis-2019-23-based-on-vat-collection\/"},"modified":"2024-04-02T14:13:44","modified_gmt":"2024-04-02T12:13:44","slug":"did-tax-fraud-and-the-shadow-economy-decline-in-the-aftermath-of-the-pandemic-analysis-2019-23-based-on-vat-collection","status":"publish","type":"publicaciones","link":"http:\/\/webecpol.esade.edu\/en\/publications\/did-tax-fraud-and-the-shadow-economy-decline-in-the-aftermath-of-the-pandemic-analysis-2019-23-based-on-vat-collection\/","title":{"rendered":"Did tax fraud and the shadow economy decline in the aftermath of the pandemic? Analysis 2019-23 based on VAT collection."},"content":{"rendered":"
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In 2020, the fall in tax revenues exceeded the fall in GDP, with a probable growth of the underground economy in tandem with the decline in economic activity. In contrast, the growth in tax revenue between 2021 and 2023 exceeded forecasts, reaching above pre-pandemic levels.<\/p>\n

To explain this unexpected growth, this study considers the emergence of the underground economy as a possible mechanism. To do so, this policy brief looks at whether there is higher VAT collection as a sign of surfacing, adapting the EVADE (Evaluating Value Added Duty Economy) methodology to statistics from the State Tax Administration Agency and the National Institute of Statistics.<\/p>\n

Our findings:<\/p>\n

    \n
  • The percentage of household consumption that pays VAT grew between six and seven points without significant changes in regulations, something that can only be explained by outcropping.<\/li>\n
  • This increase in the bases subject to control led to an increase in VAT revenue of around 6 billion euros per year in both 2022 and 2023.<\/li>\n<\/ul>\n

    To explain what may have caused this improved compliance, we hypothesize that during the pandemic there would have been social changes (possibly also stemming, at least in part, from the anti-fraud regulations) that led to an increase in card payments, decreasing the percentage of cash transactions, which are not equally controlled by the Tax Agency.<\/p>\n

    To explore this hypothesis, we analyze the Bank of Spain’s small transactions data for this period (2019-2023), distinguishing between card sales payments and ATM cash withdrawals.<\/p>\n

      \n
    • Indeed, we observe that the percentage of consumption paid by credit card, which is subject to greater control than cash, increased significantly.<\/li>\n
    • In addition, cash withdrawals barely grew in the same period, despite inflation.<\/li>\n<\/ul>\n

      To consolidate these good results, we recommend:<\/p>\n

        \n
      • Introduce more measures to encourage controlled payments.<\/li>\n
      • Extend and deepen the collection and exploitation of information to improve voluntary tax compliance, thus reducing tax fraud and the underground economy.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

        In 2020, the fall in tax revenues exceeded the fall in GDP, with a probable growth of the underground economy in tandem with the decline in economic activity. In contrast, the growth in tax revenue between 2021 and 2023 exceeded forecasts, reaching above pre-pandemic levels. To explain this unexpected growth, this study considers the emergence […]<\/p>\n","protected":false},"featured_media":11240,"template":"","yoast_head":"\nDid tax fraud and the shadow economy decline in the aftermath of the pandemic? Analysis 2019-23 based on VAT collection. - Center for Economic Policy - EsadeEcPol<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/webecpol.esade.edu\/en\/publications\/did-tax-fraud-and-the-shadow-economy-decline-in-the-aftermath-of-the-pandemic-analysis-2019-23-based-on-vat-collection\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Did tax fraud and the shadow economy decline in the aftermath of the pandemic? Analysis 2019-23 based on VAT collection. - Center for Economic Policy - EsadeEcPol\" \/>\n<meta property=\"og:description\" content=\"In 2020, the fall in tax revenues exceeded the fall in GDP, with a probable growth of the underground economy in tandem with the decline in economic activity. 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