Posted: May 27, 2015
VAT is a transactional tax, and is applied in multiple countries around the world on sales of goods or services. The various authorities responsible for implementing and monitoring the tax can adjust and amend limits and thresholds to suit their needs, and those needs include raising revenue for the national coffers, controlling spending and consumption, and influencing national and social behaviour.
With all of that going on, is VAT a multifunctional tax capable of fixing many things? There’s no doubt that VAT can be a great money-spinner – in the UK it hovers around 15% of government revenue annually. What is more difficult to establish is whether increasing VAT rates leads to a corresponding increase in revenue. Another is to what extent the impact of increasing, or removal or reduction of, VAT rates can influence and modify social behaviour, such as reducing obesity levels.
In the full article (click here to download) Greg Mayne, Burgess Hodgson associate and Director, Indirect Tax Services, examines how VAT can impact on revenue levels, support business sectors and arguably reduce waistlines!
• Greg has over 15 years experience working within a top 30 accountancy practice, advising clients and colleagues on a wide range of VAT and Duty issues. To contact him, email email@example.com