“The Moravecki legend has collapsed.” Why has the VAT gap doubled?

Dr. Slavomir Dodik, President of the Institute of Public Finance (IFP), believes that it is unjustified to hold the current government responsible for the above-mentioned statements. The VAT gap applies to 2023, and its depth – as the economist says – is an unpleasant negative effect of the previous government’s actions.

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The expert points out that the value-added tax gap has been widening for two years. – An increase was already recorded in 2022 and within two years, i.e. at the end of Mateusz Morawiecki’s government, the gap increased by more than PLN 40 billion. This means that VAT revenues have declined permanently, Dodek explains.

If nothing changes and sealing measures are not taken, there will be much less income than this. This is the same as the cost of the $500+ program. He stressed that this is the current deficit.

Dr. Slavomir Dodik noted this The former prime minister has not yet commented on the latest data. – Mr. Morawiecki is silent. Perhaps he knows what this data proves. It proves that Moravecki’s myth about the VAT gap has collapsed. You could say stronger. The economist said: In recent years, we have been dealing with the lies of the value-added tax.

The expert believes that it should be published and shown strongly, because the entire narrative concept in recent years was built on this value-added tax lie. The VAT lie was, first and foremost,There was talk of some legendary mafia, But there is no mafia and no one has arrested them. He added that if there was any mafia, the results and recovered funds were counted in millions of zlotys, but were not recovered anyway.

As Dr. Dodik emphasized, there are few examples of specific cases before the mafia that do not involve any billions.

The second is that Prime Minister Morawiecki went so far as to state that everything was financed from the VAT gap. This is not true – noted the interlocutor money.pl.

-We must already assume that the VAT gap calculated by the European Commission has decreased, however At its peak it gave at least $20-30 billion PLN is sustainable money in the budget that can be spent on permanent expenses. Meanwhile, the 500+ program cost PLN 40 billion, and has now grown by up to PLN 60 billion, says Dr. Dodek.

If we add pensions 13 and 14, we get another 20 billion. Meanwhile, Prime Minister Morawiecki traveled around Poland and said that everything was financed from this gap. The expert said that a miracle must occur as happened in Cana of Galilee and one zloty of the VAT gap calculated by the European Commission must be multiplied by 10 for these guarantees to be valid.

– It was a lie about the VAT, because the numbers showed something different, and those in power manipulated these numbers, mixing the nominal increase in the VAT with the VAT gap. There was no mafia, and the VAT gap could not finance all this. He added that it can finance at most half of the 500 plus pensions and part of the 13 and 14 pensions.

The first lie about VAT is that no one caught the mafia. It was possible to seal it because the economic situation was good. In such circumstances, companies fulfill their tax obligations better, they simply pay. These may be simple stamps influenced by our behavior, such as receiving receipts or better fulfilling tax obligations – explains Dr. Dodek.

It is also clear that the trend is reversing. The VAT gap has widened significantly again – which is worrying.

According to The Economist, it was also the VAT lie that PiS claimed that the previous government had “buried” hundreds of billions of złoty. And the fact that it added a VAT gap. – PiS politicians showed the VAT gap of PLN 250 billion. You don’t do things like that That was far-fetched.

One could equally sum up the VAT gap during the United Right’s rule, which has not disappeared. In the years 2016-2023, the amount amounts to approximately PLN 200 billion. Complete nonsense and a big lie. Dr. Dodek estimates that in Poland we are dealing with the phenomenon of the Big VAT Lie – said the IFP President.

In his opinion, manipulation of value-added tax revenue data was in the interest of the previous government. – All this narrative, distortion, mixing of concepts, manipulation, and mixing of the nominal increase in VAT revenues with the VAT gap – all of this was intentional. Now this myth has collapsed This should be emphasized very strongly – emphasized the expert.

But why is the VAT gap widening? Dr Dodek noted that it may have been shown that some criminals may use temporary changes in VAT rates for improvement purposes. – If we have a temporary reduction in VAT rates and later learn that there will be a return, we can delay or accelerate the invoice. Perhaps such temporary changes in taxes are an opportunity for fraud and this matter is not taken care of. Conditions have simply been created in which cheating is easier and can be eliminated – It is to explain.

As the expert pointed out, the more he works, the more analytically it is proven that all these temporary VAT suspensions are unprofitable. – So far, macroeconomic analyzes of other countries show that this is counterproductive and may not necessarily help lower prices on the consumer side. He stressed that this is what we are dealing with.

It is necessary to analyze tax data, check whether there is any relaxation and turning a blind eye to inspections, and whether the intensity and scope of inspections have not weakened. I think this is a good topic for a broad and in-depth review of the Supreme Audit Office. According to Dr. Dodik, there are some things that need to be improved, but we must remember that the VAT gap has decreased to 2.6%, almost to zero. However, this result was unrealistic in terms of durability, because it was caused by the very good economic situation – said the interlocutor of money.pl.

In his opinion, this was not a complete success of the tax administration. – This is also an element of the VAT lie, because before the PiS government, when the PO-PSL coalition was in power, we witnessed a global financial crisis that lasted for a very long time and had a strong impact on the world’s economies. He says that crisis has had a much worse impact on global economies and Polish companies than the Covid crisis, including the energy crisis, the data show.

– Then, due to the global economic situation, the gap actually increased. One element of this lie is the fact that the VAT gap has widened in almost all Central and Eastern European countries, something the previous government did not mention. This means that Donald Tusk will also have to bury VAT money in other countries, to paraphrase PiS’s black PR against the PO entitled “Where are these buried billions?” Government propaganda published advertisements stating that Tusk had buried VAT money. He said the gap had already worsened in all countries.

It is also improving in all countries recently. The VAT gap was narrowing not only in Poland. Dr. Dodik admitted that he does not know what the situation is in other countries now because he did not see the data, but the economic situation also helped – explains Dr. Slavomir Dodik.

It also indicates whether the government can take any steps to reduce the loss of tax revenue. – When fighting the value-added tax gap, it is necessary to balance the issue of excessive burdens on entrepreneurs, so as not to kill the economic situation, and at the same time ensure the efficiency of the tax system so that revenues are as high as possible – concluded Dr. Slavomir Dodik.

The VAT gap is the difference between the value of theoretical (expected) VAT revenue and the actual VAT revenue obtained.