What is the experience of other countries with national retail sales taxes? Q.What is the experience of other countries with national retail sales taxes? A.No country has attempted a truly ambitious retail sales tax. Those that have tried more modest versions have abandoned them in favor of value-added taxes. Read more about What is the experience of other countries with national retail sales taxes?
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 would and would not be taxed under a VAT? Q.What would and would not be taxed under a VAT? A.Typically, a value-added tax covers all or most forms of consumption. Read more about What would and would not be taxed under a VAT?
