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?
How would small businesses be treated under a VAT? Q.How would small businesses be treated under a VAT? A.Most countries exempt small businesses from value-added tax, although many small businesses choose to voluntarily register for the VAT. Read more about How would small businesses be treated under a VAT?
Who bears the burden of a national retail sales tax? Q.Who bears the burden of a national retail sales tax? A.A revenue-neutral national retail sales tax would be more regressive than the income tax it replaces. Read more about Who bears the burden of a national retail sales tax?
