The spread of Value Added Tax (VAT), also called Goods and Services Tax (GST) has been the most important development in taxation world over in the last half-century. Limited to less than ten countries in the late 1960s, it has now been implemented by over 160 countries worldwide, making it the world’s most commonly used tax. In these countries, it typically accounts for one-fifth of total tax revenue.
The recognized capacity of VAT is to raise revenue in a neutral and transparent manner. At the same time as VAT was spreading across the world, international trade in goods and services was expanding rapidly as part of globalization developments and revolution. Most countries have adopted similar principles for the operation of their value added tax system, but there remain many differences in the way it is implemented.
The recognized capacity of VAT is to raise revenue in a neutral and transparent manner. At the same time as VAT was spreading across the world, international trade in goods and services was expanding rapidly as part of globalization developments and revolution. Most countries have adopted similar principles for the operation of their value added tax system, but there remain many differences in the way it is implemented.
