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The largest tax evasion that significantly affects public finance deficit in Slovakia is associated with value added tax. A success of fiscal consolidation and its sustainability will largely depend on increasing the efficiency of value added tax system and reducing VAT revenue losses. While in 2005 the total VAT revenue losses in Slovakia amounted to 1.7 % of GDP, in 2011 they reached 4 % of GDP which is the annual shortfall in tax revenues of 2.7 billion euros. Taking into account the estimated VAT revenue losses as well as the results of tax audits, the tax authorities in Slovakia identified only 18 % of tax evasion. So there is 80 % probability of not detecting tax evasion relating to VAT. [ABSTRACT FROM AUTHOR]

Value added tax revenues represent almost half of the total tax revenues of public adminstration in Slovakia. Discrepancy between the growth of VAT revenues and the growth of its macro-economic base in recent years can be attributed mainly to the increase of tax evasion as well as to the low efficiency of VAT collection. The efficient tax collection and the total loss of tax revenues as a result of non-declaration and nonpayment of VAT stand therefore in the center of attention of the Slovak government. A serious problem is also the inability to enforce tax liabilities from the taxpayers and the lack of payment discipline. The paper analyses selected measures adopted by the Slovak government which should help to eliminate tax evasion relating to VAT and opinions of tax experts who evaluated adopted anti-fraud measures through a questionnaire. [ABSTRACT FROM AUTHOR]