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Improving performance of VAT systems
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10 years 11 months ago - 10 years 11 months ago #24
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Richard Cornelisse
Improving performance of VAT systems was created by rico
Improving performance of VAT systems is a priority in the context of the economic crisis
By Jeffrey Owens is the Director, Centre for Tax Policy and Administration at the Organisation for Economic Co-operation and Development
The global spread of Value Added Taxes (sometimes referred to as Goods and Services Taxes) has been the most remarkable development in taxation over the last 50 years. Operated in less than 10 countries in the late 1960s, VAT now raises one fifth of the world’s tax revenue and still more countries are adopting it. The increasing importance of VAT as a source of government revenue is likely to continue as countries deal with fiscal consolidation pressures in the wake of the economic crisis while seeking to restore growth.
The key role of VAT in a post-crisis environment is generally recognized by governments and tax policy makers. In June 2009, OECD ministers declared that “Growth-oriented tax reforms would generally involve shifting revenue from corporate and personal income taxation or social security contributions onto consumption and property taxes, including housing taxation.” Recent OECD analysis of growth- oriented tax reforms concluded that “A revenue-neutral tax reform that shifts the balance of taxation more toward consumption and recurrent residential property taxes could [...] strengthen the growth of output over the medium term.” as “... corporate taxes are the most harmful type of tax for economic growth, followed by personal income taxes and then consumption taxes, with recurrent taxes on immovable residential property being the least harmful.” (OECD (2010), Tax Policy Reform and Economic Growth, OECD Publishing).
A growing number of countries that operate a VAT are considering fundamental reform to increase their revenue raising capacity and to address inefficiencies of the current system. It is a key priority for the OECD to actively support countries in this exercise, as well as ensuring that this interaction between VAT systems does not act as a barrier to world trade. This article highlights the key areas of attention.
Read more: Improving performance of VAT systems is a priority in the context of the economic crisis
By Jeffrey Owens is the Director, Centre for Tax Policy and Administration at the Organisation for Economic Co-operation and Development
The global spread of Value Added Taxes (sometimes referred to as Goods and Services Taxes) has been the most remarkable development in taxation over the last 50 years. Operated in less than 10 countries in the late 1960s, VAT now raises one fifth of the world’s tax revenue and still more countries are adopting it. The increasing importance of VAT as a source of government revenue is likely to continue as countries deal with fiscal consolidation pressures in the wake of the economic crisis while seeking to restore growth.
The key role of VAT in a post-crisis environment is generally recognized by governments and tax policy makers. In June 2009, OECD ministers declared that “Growth-oriented tax reforms would generally involve shifting revenue from corporate and personal income taxation or social security contributions onto consumption and property taxes, including housing taxation.” Recent OECD analysis of growth- oriented tax reforms concluded that “A revenue-neutral tax reform that shifts the balance of taxation more toward consumption and recurrent residential property taxes could [...] strengthen the growth of output over the medium term.” as “... corporate taxes are the most harmful type of tax for economic growth, followed by personal income taxes and then consumption taxes, with recurrent taxes on immovable residential property being the least harmful.” (OECD (2010), Tax Policy Reform and Economic Growth, OECD Publishing).
A growing number of countries that operate a VAT are considering fundamental reform to increase their revenue raising capacity and to address inefficiencies of the current system. It is a key priority for the OECD to actively support countries in this exercise, as well as ensuring that this interaction between VAT systems does not act as a barrier to world trade. This article highlights the key areas of attention.
Read more: Improving performance of VAT systems is a priority in the context of the economic crisis
Richard Cornelisse
Last edit: 10 years 11 months ago by rico.
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