Is the VAT a money machine? Q.Is the VAT a money machine? A.A common criticism of the value-added tax is that it is simply a “money machine” that will enlarge a federal government by supplying a steady source of revenue. The empirical evidence has largely shown that this has not been the case. Read more about Is the VAT a money machine?
Why is the VAT administratively superior to a retail sales tax? Q.Why is the VAT administratively superior to a retail sales tax? A.Retail sales taxes suffer from several enforcement problems. Most notably, the government has no record of transactions with which to verify retailers’ tax payments. In a value-added tax, the chain of crediting creates a natural audit trail, and the seller has more incentive to report the transaction and pay tax. Read more about Why is the VAT administratively superior to a retail sales tax?
What is the history of the VAT? Q.What is the history of the VAT? A.The value-added tax is a relatively new tax. It was designed by two people, independently, in the early 20th century. Many European countries enacted a VAT in the 1960s and 1970s. Other countries followed in the 1980s and thereafter. Read more about What is the history of the VAT?