Αρχική Σελίδα Αρχική Σελίδα
  Rss Feeds

THE EFFECT OF CARD PAYMENTS ON VAT REVENUE IN GREECE

 

 

George Hondroyiannis

Bank of Greece and Harokopio University

 

Dimitrios Papaoikonomou

Bank of Greece

 

 

ABSTRACT

The effect of card payments on VAT revenue performance in Greece is investigated using quarterly observations on card transactions during 2002q1-2016q2. Time-varying-coefficient methods are employed, in order to study the role of increasing card payments after the imposition of cash restrictions in July 2015. We find that (i) a 1pp increase in the share of card payments in private consumption results in approximately 1% higher revenue through increased compliance; (ii) lowering the VAT rate can generate revenue gains; (iii) card transactions may facilitate tax buoyancy. It is argued that stronger incentives for using card payments in tax evading industries can help lock-in the recent strong revenue performance when cash restrictions are lifted. 

 

 

JEL classification: E62, H21, H25, H26, K34

Keywords: VAT, card payments, time-varying-coefficients, Greece

 

Acknowledgements: We would like to thank an anonymous referee for helpful comments and suggestions on an earlier draft and K. Kotsoni and M.Vergou for useful discussions. The views expressed are those of the authors and should not be interpreted as those of their respective institutions.

 

 

 

 

 

Correspondence:

George Hondroyiannis,

Economic Analysis and Research Department,

Bank of Greece,

21, E. Venizelos Avenue,

Athens 102 50, Greece,

Tel. +30 210 3202429

Email:ghondroyiannis@bankofgreece.gr

Πλήρες Κείμενο