RISK ON THE TAX SYSTEM OF THE E.U. FROM 2016 TO 2022

Constantinos  Challoumis

doi:10.2478/eoik-2023-0058

Authors

Constantinos Challoumis National and Kapodistrian University of Athens (N.K.U.A.), Greece

DOI:

https://doi.org/10.2478/eoik-2023-0058

Keywords:

risks, tax system, the cycle of money, sensitivity

Abstract

This paper discusses the risks that businesses face in the tax system
from the point of view of the cycle of money. The current research is
about the influence of companies that participate in global tax transac-
tions on the tax revenue. The results show that controlled transactions
have a negative impact on the GDP and tax revenue, discouraging any
uncontrolled investments. The diminished risk increases the tax reve-
nue. The objective of this research is to show that a tax policy of a low
tax rate increases uncontrolled transactions, leading to a growth of
GDP and tax revenue. This work complies with the theory of the Cy-
cle of Money. The impact of risk on tax revenue has been determined
by comparing results with and without this factor. The Q.E. method
uses mathematics and programming, allowing the determination of an
appropriate equation by a feedback procedure. An econometric anal-
ysis is applied to check the results of the model. A special technique
is introduced, for the first time, to identify the risk by the sensitivity
impact of one factor to another one. Sensitivity is determined as the
ability of one factor to counteract instantly the changes of another
one. If the counteract is instant, it is considered that the sensitivity
is high. If the counteract delays, it is determined that the sensitivity
is low. For high sensitivity, the risk is low, and the adjustment is the
appropriate one. For low sensitivity, the risk is high, as the adjustment
is not adequate.

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