VAT Refunds: A Review of Country Experience
IMF Working Papers, November 1, 2005
Source details
- Canonical URL
- VAT Refunds: A Review of Country Experience
Other formats
Bibliographic details
- Authors: Graham Harrison, Russell Krelove
- Published: November 1, 2005
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451862379.001
Summary and scope
- Examines refund approaches of tax administrations in 36 developing, transitional, and developed countries.
- Focuses on the invoice-credit form of value-added tax (VAT) where some businesses—notably exporters—pay more tax on purchases than is due on sales and can seek refunds of excess credits.
- Identifies the refund process as the "Achilles heel" of the VAT because of practical problems in refunding.
Main problems identified
- Opportunities for fraud and corruption in the refund process.
- Denial of refunds by governments with cash shortages.
- Practical difficulties in implementing refunds despite straightforward principles in theory.
Evaluation and analytical focus
- Evaluates the effectiveness of country approaches to VAT refunds.
- Considers compliance issues faced by countries during different stages of development.
Conclusions and recommendations (as presented)
- Suggests a model of best practice for VAT refund procedures that takes into consideration compliance issues faced by countries during different stages of development.