VAT has direct as well as indirect effects on several economic variables. The effects of VAT felt all over the economy because this tax influences several macro economic variables such as savings, investment, employment, distribution, prices and efficiency of resources. VAT directly affects some of these variables whereas the effect on other is indirect. One of the most important effects is economic growth which is directly linked to revenue efficiency of VAT (Purohit, 2001). Revenue efficiency aspect of VAT is a debatable issue and experiences vary from country to country and region to region. Provision of set-off leads revenue losses and these vary from 20 to 40 percent in different countries. Revenue losses are recouped through base expansion, higher standard rate, by checking tax evasion or through better tax compliance due to attributes of simplicity and provisions of cross –checking. Due to uncertain behavior of these parameters in different countries, VAT is introduced with the assumption of revenue neutrality. Revenue productivity of VAT may not …show more content…
During the period 1980-81 to 1996-97 buoyancy co-efficient of sales tax in different States was more than 1 in majority of the States with all India average of 1.02(Purohit, 2001). Sales tax buoyancy with respect to GSDP at factor cost for all States taken together for 1993-94 to 2004-05 was 1.053 (RBI, 2005). The buoyancy of sales tax revenue has been generally, higher as compared to those of other State taxes as well as of excise or custom duties levied by the Central government. The crucial issue for the State finance is that the revenue efficiency of State VATs, at least, remains the same as compared to the taxes like GST and CST it will replace (Das,
By reviewing the state sales tax, and the income tax charged by thee three states, I can identify the type of tax that each one of them uses to acquire their revenue. Texas uses a regressive tax type, because it lacks of income tax revenue that divides each individual by brackets according to their incomes, while the sales tax charges everyone the same rate, regardless of their income, making this type of taxation a big problem for the poor. Utah also has a regressive tax because it charges a flat 5 percent from income Tax to e...
The FairTax Act will replace these costly, oppressively complex and economically inefficient taxes with a progressive national retail sales tax, which would be levied on the final sale ...
Any judgment of the internal financing capability of a municipality is, therefore, a judgment on its governance standards. A better governed municipality implies better information availability, better assessment capability and better collection efficiencies that are then reflected in the quantum of revenues generated through internal financial support levers. Consequently, any effort to significantly get better the infrastructure provision scenario in Gimbi town will need to begin by giving a significant push to improving the assessment, enforcement and collection of internal revenue levers (Anand Sahasranaman & Vishnu Prasad, 2014). According to the report of Gimbi town Municipality, annual average revenue is only 5.6 million. This indicates that there is a problem of exhaustively use of the resource and in efficient revenue collection from the identified
Case 1: Hilary is a famous mountain climber, this is the reason why the Daily Terror Newspaper gain the interest to offer her $10,000 dollars to write her life story, but if she prefer to write in on her own without any help from a writer, she gains all the copyrights to claim the $10,000 dollars coming from the Daily Terror when the story is published. She also decided to sell the manuscript to the Mitchell Library for $5000 dollars and later she also receives $2000 dollars for selling several mountains climbing photographs.
The trends in unemployment affect three important macroeconomics variables: 1) gross domestic product (GDP), 2) unemployment rate, and 3) the inflation rate.
The United States tax system is in complete disarray. Republicans and Democrats agree that the current tax code is complex, unfair, and costly. The income tax system is so complex; the IRS publishes 480 tax forms and 280 forms to explain the 480 forms (Armey 1). The main reason the tax system is so complex is because of the special preferences such as deductions and tax credits. Complexity in the current tax system forces Americans to spend 5.4 billion hours complying with the tax code, which is more time than it takes to manufacture every car, truck and van produced in the United States (Armey 1). Time is not the only thing that is lost with the current tax system; Americans also lose great deal of money complying with the tax code. Resources that are currently wasted on record keeping, filing forms, learning the tax code, litigation, and tax avoidance. The cost of complying with the current tax code totals about $200 billion annually, or $700 for every man, woman, and child in America (Armey 1). The overwhelming consensus that the current tax system is inadequate has ignited the search for tax reform. There are numerous proposals for tax reform; one particular proposal brought forth by various conservatives is the idea of national flat rate income tax. The idea is to replace the current income tax with a single rate that everyone pays.
vat at this current moment that the brain will not be able to tell a
It can discourage business investment and expansion, as additional profit is taxed at higher rates
We are all consumers, and we buy diverse products every day. But, do you know what the main factor is that influences us to choose a product? If someone selects a cloth, maybe he pays attention to its quality! Customers’ decisions can be changed depending on what the main factors they are looking at. Various influences can cause consumers to select different products.
The tension lies where Land tax is decreasing and Excise tax increasing. Thomas Paine stated that taxes would increase through the consumption of beer. The Aristocrats/Wealthy were not affected by the increase as they ‘brewed their own beer free of this duty’ (Paine.T, 1792). This affected those who were unable to brew their own beer and had to purchase it.
“These taxes are set high enough to finance the administration of new laws, but not so high that customers are driven back to the black market” (Frosch, 2013). There are many financial benefits that a state can help pay for the enforcement and other fundamental issues. One bad thing about taxing so high is that you can simply crowd out the regulated market.... ... middle of paper ... ...
In the following report we have first tried to clear the concept of the multiplier then carried on with explaining various theoretical aspect of tax multiplier, government spending multiplier and planned investment multiplier. Then we have tried to compare the change in expenditure and change in GDP in Indian economy by providing data which was extracted through a secondary source.
However if only indirect taxes are implemented, the revenue could be useful to fund not only negative advertising, the consumers who wish to relieve the taxation burden could change to other uses to carry their groceries such as a shopping bag that can be used over many times.
The cheque means a document to order the bank to pay specific amount from a person’s account to another person who had been issued it at bank. Section 73 of the Bills of Exchange Act defines cheque as bill of exchange, as payable on demand and it drawn by banker. The cheque most widely used as commercial paper today.
Tax expenditures are popularly known as tax loopholes or tax breaks. It departures from the normal tax structure and ...