value added tax

Informality, compliance costs, and weak administrative capacity all constrain the effectiveness of VAT in lower-income countries. However, it is a crucial source of revenue that is better than the alternatives, so governments should focus on reforms ...

When thinking about VAT incidence in countries with high registration thresholds it is important to consider the impact on VAT-unregistered firms. Their interaction with the VAT system matters for progressivity and introduces distortionary effects on...

Value-added tax (VAT) can facilitate tax enforcement by generating paper trails on transactions between firms

Taxes affect which domestic suppliers firms choose to trade with in India, leading to less within-country trade and firm growth

Compared to existing income taxes, a value-added tax limits the tax base to information that can easily be monitored, reducing the role of discretion