VAT revenue and the financial effects of newer sales-tax models

In 2001 VAT revenue was less than in 2000 despite positive GDP. The reasons for this development could not be identified immediately. Modifications of private consumption were listed as an explanation as well as structural shifts in the macroeconomic components for VAT assessment. In addition the increased importance of "roundabout" trade is seen as a factor. These different explanations were checked for their practical relevancy in an expertise for the Federal Ministry of Finance followed by a presentation of different models designed to reduce VAT tax shortfalls. The study concludes that before a radical change of the VAT system is made, all available options to make the present system more fraud-secure should be exhausted.