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The resources volume and size composing public funds, as well as the methods of collection are elaborated with the help of fiscal policies. Value added tax (VAT) is considered to be an important tool for streamlining the collection of taxes. Previous studies show that, in the case of trade liberalization, VAT is more efficient than other taxes such as turnover tax or income tax, because it can offset the losses resulting from lower prices. Thus, VAT collection can increase the volume of tax revenues for financing activities that contribute to economic growth. However, VAT compliance rate depends on various factors. A low VAT compliance leads to tax evasion, which is a negative effect caused largely by the high level of VAT rates applied, especially in the case of emerging economies. This study includes an analysis of VAT compliance in the case of Central and Eastern European countries, members of the European Union. We analyze cross-border VAT rates over a period of 15 years, with an emphasis on the economic crisis of the last decade. The preliminary results show us a negative impact of the high VAT rates on the level of VAT compliance. A more in-depth analysis is needed to test the research hypotheses.

fiscal policy efficiency, sustainable economic growth, VAT efficiency, cross-border analysis, tax evasion