A report on Value Added Tax Essay -- Economics

A report on Value Added assessIntroductionValue Added tax tax revenue originated in France in 1954 and is under capital punishment in more than hundred countries. Value Added tax revenue isperceived by many as means to promote neutrality and uniformity of assessburden and to provide incentives for increased productivity andindustrialization. The spread of tub to the certain and thedeveloping countries alike certainly, makes for an interesting study.Financial clock (London) too hard-pressed the growing importance of VATwhen it observed in its centennial reexamine The economic andtechnological changes of the second half of the century support make VATthe quintessential modern tax. It go forth not be an exaggeration if onewere to say that the emergence of the VAT as an substantial and elasticsource of revenue over the last four decades is curious in thehistory of taxation.Despite the widespread proclamation of VAT, on that point have beendifficulties in implementing VAT in its true spirit like in the caseof Argentina, Brazil, Canada and India. VAT has been introduced inmore than 120 countries developed, developing and those economies,which atomic number 18 in transition. There have also been attempts to introduceValue Added levy in USA, which however has preferred to retain theRetail Sales appraise system. Yet, those difficulties notwithstanding, itcan be said that Value Added Tax system by all odds has its advantagesand is certainly recommended for most economies, particularly thedeveloping ones.DefinitionValue Added Tax is a tax on the value added at each comprise ofproduction and distribution process and can be aptly delineate as one ofthe forms of consumption taxation since the value added by a firmrepresents the difference between its receipts and cost of purchasedinputs.Need for VATValue Added Tax is one of the most radical reforms that have beenproposed for the Indian economy after years of political and economicdebate. The reasons for advocating Value Added Tax is that it leave alonereplace a complicated tax structure that will also do a instruction with thefraudulent practices. Following are several(prenominal) of the most importantbenefits if VAT is introduced. VAT will encourage and chair in a better-administered system thatwill close avenues of tax evasion. The taxpayers will also becompelled to keep proper records of their sales and purchases. VAT... ...centerfor the revenue loss for states from the change over. The center hasensured that this will not be so and has assured compensation in caseof deficits. If VAT system is select there would be no exemptions orincentives. This can adversely call for some business houses. To crownall this there was also political opposition fearing disfavor of thetrading community and the resulting political fallout.VAT the way forwardIn order to make the VAT a positive success following could be fewsuggestions.* The deadline for all legislations and computerizations should be uniform across the states.* VAT should be implemented by all the states at the same time.* Laws regarding VAT should be uniform across all the states and there should be no disparity among the states.* There should be a observe mechanism at the central to overlook the new system.* A heap of changes have to be made in ancillary legislation (income tax, go with law etc.) to ensure VAT compatibility.Bibliography1. www.ciionline.org2. The Indian Express dt. June 24, 20043. The Economic Times dt. 10-03-04, 15-06-04, 18-06-04 & 27-07-044. Magazines & journals