IMF Working Papers

VAT Attacks!

By Michael Keen

June 1, 2007

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Format: Chicago

Michael Keen. VAT Attacks!, (USA: International Monetary Fund, 2007) accessed November 12, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Like the theory of the second best that the 2006 congress marks, the VAT is now fifty years old. Judged by the extent and speed of its spread around the world, and the revenue that it raises, the VAT would seem to have been a remarkable success. Over the last few years, however, it has come under a series of attacks. This paper considers three of the most prominent of these. One is the fear (raised mainly in the United States) that the VAT actually does too good a job of raising tax revenue. The second is the view that the VAT does a bad job of taxing the informal sector-and that tariffs might be a better revenue-raising instrument for many developing countries. The third attack is the most literal, by criminals rather than theorists: in the European Union and elsewhere, sophisticated VAT fraud, targeting its refund provisions, has become a serious concern.

Subject: Consumption taxes, Revenue administration, Tariffs, Tax efficiency, Value-added tax

Keywords: Invoice VAT, Refund claim, Tax revenue, VAT fraud, VAT gap, Withholding tax, WP

Publication Details

  • Pages:

    21

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2007/142

  • Stock No:

    WPIEA2007142

  • ISBN:

    9781451867060

  • ISSN:

    1018-5941

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