The Role of The Supreme Audit Institutions in Counteracting VAT Gap in the European States. A Cross-Country Comparative Study

This study follows the research conducted so far on the multi-dimensional role of supreme audit institutions (SAIs) in strengthening social capital and improving the functioning of public organisations. It has been found that international organisations established by SAIs, should include the problem of the VAT gap in their audit strategies. In addition, they should tighten international cooperation, including training cooperation, considering that irregularities in VAT settlements occurring in all Member States of the European Union are favoured by the specific nature of intra-community transactions. Institutional weaknesses in tax collection prove the low potential of the state. Due to the lack of publicly available information, it has not been established whether the SAIs from the studied countries with the largest size of the VAT gap – Malta and Greece – analysed the reasons for its creation. SAIs from other countries – Great Britain, Germany, Romania and Italy analysed the reasons for the ineffective reduction of the VAT gap by national tax systems. However, there is no information about audits involving human resource management in tax offices. Meanwhile, this issue is crucial not only from the point of view of the effectiveness of tax prevention but, more broadly, to strengthen the social capital necessary to create an organisational domestic and international environment based on reliability that will bring tax accountability. The formulated directional proposals for examining the tax system in terms of the effectiveness of reducing the VAT gap, due to their universality, can be applied in various countries.