Search or Ask your question here.
VAT(Value Added Tax)-its advantages and disadvantages?
The advantagea and disadvantages of VAT?
Asked by: ayesha_thaseen May 26, 2008 - 71 Months Ago.
Viewed 18229 times
Question must adhere to our
VAT is a governmental tax charged on purchases. A broad based consumption tax implies tax on services, not just products. When asked about advantages and disadvantages, the question implies comparison to alternatives.
If VAT is not charged, then income taxes are necessarily higher, unless the government has some other alternative to raise funds. There's the option to cut services of course.
In economic terms, when comparing VAT advantages to income taxes, VAT results in more savings and less consumption, because consumption costs more.
Because VAT is charged based on purchases, it's not possible to tailor the tax based on income, other than adding taxes to luxury items. Income taxes can be specifically scaled progressively so that higher income earners pay higher tax rates.
Answered by: shshao - 51 Months Ago.
Please sign in.
Comments must adhere to our
VAT(Value Added Tax)-its advantages and disadvantages? The advantagea and disadvantages of VAT? - HelpGlobe.Business.Tax
Answers must adhere to our
Other Questions from 'ayesha_thaseen' ...
What are some of the advantages of hardwood flooring over carpet?
Which country levies the highest personal income tax in the world?
Which states has the highest TAXES? And where are taxes lowest?
Which countries levies the highest corporate tax rates in the world?
What are the differences, advantages and disadvantages of new LED screens for laptops?