In a recent study analysing the VAT gap published by the European Commission, the VAT lost by Member States in 2021 was €61 billion, over €30 billion less than the comparable figure in 2020. The VAT gap is a measure of the difference between what should be collected and what is actually collected. The unprecedented year-on-year improvement is likely due to a variety of factors, although the uplift in electronic payments and online shopping in 2021 is likely a significant driver. The rate of VAT compliance tends to be greater online and with e-payments.
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