Influence of budget arrears on financial security of the state budget

Abstract

Financial security of a state can be defined in a number of ways. Among others, it can be defined as a direct relation with a financial threat connected with the budget revenue collection. To put it in other words – a financial security of a state can be understood as an accumulation of excessive tax arrears compared to state budget revenues. This paper discusses a significant increment in tax arrears, which have been noted after 2012. The level of tax arrears in comparison with the state budget is of a memorial nature. The tightening of the VAT loophole and an improvement in the effectiveness of the tax administration machine in revealing tax liabilities strongly influenced high budget arrears. This paper points out the low efficiency of tax arrears collection by enforcement bodies. The high level of the arrears in comparison with the state budget negatively impacts businesses run by those who are behind payments which are due to the state budget.

Keywords

• state financial security
• tax liability
• tax arrears
• loophole in the tax on goods and services
• form of seeking arrears