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The Revenue Administration–Gap Analysis Program: Model and Methodology for Value-Added Tax Gap Estimation
Author:
Mr. Eric Hutton
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Series:
Technical Notes and Manuals
Volume/Issue:
Volume 2017: Issue 004
Language:
English
Publication Date:
07 Apr 2017
DOI:
https://doi.org/10.5089/9781475583618.005
ISBN:
9781475583618
ISSN:
2075-8669
Pages:
32
Keywords:
TNM; RA-gap VAT gap estimation methodology
Legal-disclaimer:
This Technical Guidance Note should not be reported as representing the views of the IMF. The views expressed in this paper are those of the authors and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The IMF Fiscal Affairs Department’s Revenue Administration Gap Analysis Program (RA-GAP) assists revenue administrations from IMF member countries in monitoring taxpayer compliance through tax gap analysis. The RA-GAP methodology for estimating the VAT gap presented in this Technical Note has some distinct advantages over commonly used methodologies. By using a value-added approach to estimating potential VAT revenues, as compared to the more traditional final consumption approach used by most countries undertaking VAT gap estimation, the RA-GAP methodology can provide VAT compliance gap estimates on a sector-by-sector basis, which assists revenue administrations to better target compliance efforts to close the gap. In addition, the RA-GAP methodology uses a unique measurement for actual VAT revenues, which isolates changes in revenue performance that might be due to cash management (e.g., delays in refunds) from those due to actual changes in taxpayer compliance.
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Cover Technical Notes and Manuals
Technical Notes and Manuals
ISSN:
2075-8669
Publisher:
International Monetary Fund