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Sunday, February 2, 2020 | History

4 edition of Value-added tax as a new revenue source found in the catalog.

Value-added tax as a new revenue source

James M. Bickley

Value-added tax as a new revenue source

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Published by Congressional Research Service, Library of Congress in [Washington, D.C.] .
Written in English

    Subjects:
  • Value-added tax -- United States

  • Edition Notes

    StatementJames M. Bickley.
    SeriesCRS issue brief -- IB91078i., Major studies and issue briefs of the Congressional Research Service -- 2004, 04-IB-91078i.
    ContributionsLibrary of Congress. Congressional Research Service.
    The Physical Object
    FormatMicroform
    Pagination9 p.
    ID Numbers
    Open LibraryOL16357951M
    OCLC/WorldCa63760535

    Because a VAT taxes consumption, rather than income, it tends to encourage saving and investment. The success of VAT systems in emerging economies is welcome news for the beneficiaries of that tax revenue. This shift in supply and demand is not incorporated into the above example, for simplicity and because these effects are different for every type of good. In the Philippines, for example, Senator Rafael Recto, the chief proponent of VAT in the s, was voted out of office by the electorate when he ran for re-election. Finally, unlike the estate tax, the gift tax is computed on an amount that does not include the tax itself. The story explains : With… President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax.

    Although a value-added tax VAT taxes goods and services at every stage of production and sale, the net economic burden is like that of a retail sales tax. Inaccurate computation of Value Added Tax figures. Some industries will be affected more than others. That is, more is lost due to supply and demand shifts than is gained in tax. Demogrants Exempting, zero rating, or excluding certain essential consumption goods from the tax base e.

    Many of these concerns apply to all industries, some just to a few. In the past, the allowance for doubtful accounts in financial reporting preceded the actual write-off for tax purposes and could result in a deferred tax asset. But once the VAT gave politicians a new source of revenue, spending exploded. Consider that under the current standard, software contracts that contained multiple element deliverables were treated as a single unit of accounting unless vendor-specific objective evidence VSOE of the fair value of the undelivered elements was available. France and Germany followed, with many other European nations imposing the tax within 5 years.


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Value-added tax as a new revenue source by James M. Bickley Download PDF Ebook

Those opposed argue that it would tend to discourage gifts and therefore tend to preserve wealth concentration. The IRS grants some changes on an automatic consent basis, while other changes may require the Service's advance consent. The registration covers all the business activities of the organisation.

Advertised and posted prices generally exclude taxes, which are calculated at time of payment; common exceptions are motor fuels, the posted prices for which include sales and excise taxes, and items in vending machines as well as alcohol in monopoly stores.

May 28, by Dan Mitchell The Washington Post reports that there is growing interest among politicians for a form of national sales tax known as the value-added tax VAT.

In addition, some goods and services are exempt from VAT. These theoretical advantages are well known, but Dina Pomeranz, an economist at the University of Zurich, found a way to test how important they are in practice.

Politicians love VATs both because they generate huge amounts of revenue and because the tax is hidden in the price of products and thus can be increased surreptitiously. All exported goods are exempted from any VAT payments.

Value Added Tax

A VAT is therefore regressive if it is measured relative to current income and if it is introduced without other policy adjustments.

Each approach poses problems and in the short run probably would involve a revenue loss. But what makes this battle difficult is that some putative allies are on the wrong side. The tax has become so easy to raise that VAT rates in Europe average more than 20 percent.

On the positive side, many of the changes initiated by the standard will likely only affect the computation of a book-tax difference and the related deferred taxes.

Critics charge that a VAT is essentially a regressive tax that places an increased economic strain on lower-income taxpayers and also adds bureaucratic burdens for businesses. Many domestically consumed items such as fresh foods, water, electricity and land public transportation are zero-rated, while some supplies such as education and health services are GST exempted.

According to one International Monetary Fund study, any nation that switches to VAT initially feels the negative impact of reduced tax revenues despite its greater revenue potential down the road.

U.S. tax and FASB’s new paradigm for revenue recognition

Some industries will be affected more than others. It would also add to the body of knowledge. Under the current system, wages and salaries in a corporation are completely deductible, while capital investments are partially taxed.

Advocates claim it would increase government revenue, help fund essential social services, and reduce the federal deficit. Its last meeting was in November Value-added tax as a new revenue source book say a business buys cloth, thread, zippers and buttons for $80, pays $10 for labour to produce a shirt and sells it for $ Cost of materials $80 Cost of Labour $10 Sales Price $ Value Added = $ -$80 = $20 Profit = $ - ($80 + $ Changes to revenue recognition accounting could impact a company’s taxes, from tax accounting method changes, cash taxes, book-tax differences, deferred taxes, state income taxes, sales & use tax, indirect taxes, transfer pricing documentation and strategies, and international tax planning and galisend.com a result, tax departments should help analyze the new standard to identify the tax.

A value-added tax (VAT), known in some countries as a goods and services tax (GST), is a type of tax that is assessed incrementally. Like an income tax, it is based on the increase in value of a product or service at each stage of production or distribution. However, a VAT is collected by the end retailer and is usually a flat tax, and is therefore frequently compared to a sales tax.ABSTRACT.

The research work is carried pdf specifically to appreciate value Added Tax as an important source of revenue to the government in Nigeria and its importance to .Jan 28,  · This book presents new proposals for a value-added tax, a financial transactions tax, wealth and inheritance taxes, reforming the corporate and .ABSTRACT.

The research work is carried out ebook to appreciate value Added Tax as an important source of revenue to the government in Nigeria and its importance to .