What Is the Difference Between VAT & E-Vat?
A value added tax (VAT) is a consumption tax on products applied at every level of production, from the beginning stage as raw materials to the final stage as finished products. The VAT passes the cost of the tax onto the final consumer in the price paid for the product.
Other People Are Reading
-
Philippines
-
The Philippines expanded their VAT because of rising budget deficits. The expanded value added tax (EVAT) is the VAT adopted by the Philippines in May 2005 as an update to their earlier version adopted in 1988. The EVAT was passed to address a huge deficit in the Philippines.
Increased Revenue
-
The EVAT expanded the consumption tax base to other industries. The EVAT passed in the Philippines addressed budget deficits by expanding the tax base by including industries that were previously exempted from participating in the VAT system, such as petroleum, the arts and services offered by doctors and lawyers. Passing of the EVAT also gave the government the option of increasing the EVAT tax rate from 12 percent to 15 percent.
-
VAT in the USA?
-
A VAT can be a good way in increase tax revenue. A value added tax system has been adopted in the Philippines, the European Union and many nations throughout the world as an alternative to a traditional sales tax. Historical budget deficits in the United States have prompted discussions of implementing a VAT in lieu of increasing individual or corporate income taxes, or spending reductions which would cut government services. In the Oct, 2, 2009, "Wall Street Journal" blog, Real Time Economics, former Fed Chairman Alan Greenspan stated, "I don't like the value added tax, but it's the least worst way," to increase revenue.
-
References
Resources
- Photo Credit tax defined image by Christopher Walker from Fotolia.com funds running low image by Andrei Filonov from Fotolia.com business production dollar image by Nicemonkey from Fotolia.com gold coins image by Roman Sigaev from Fotolia.com
