scholarly journals Incidence of Value Added Tax, Effects and Implications

2018 ◽  
Vol 10 (10) ◽  
pp. 52
Author(s):  
George Obeng
Keyword(s):  
Market Failure ◽  
Public Expenditure ◽  
Value Added ◽  
Current Debate ◽  
Value Added Tax ◽  
Economic Activities ◽  
Economic Resource ◽  
Tax Effects ◽  
Production And Consumption ◽  
A Charge

The current debate in the field of taxation and public finance is the concern of Value Added Tax (VAT) being inflationary and who the incidence or burden of payment falls. The implication from available literature and studies points to the fact that VAT can impact negatively on production and consumption, stifling free flow of economic activities. Literature is reviewed to find out the incidence of VAT and its implications on the firm and the consumer. It is established that VAT is not a cost to the business firm to make it inflationary but a charge independent of its pricing mechanism. It is also not extra cost to the consumer but part appropriation of the economic resource flow accruing to the consumer to settle the legitimate obligation of financing public expenditure. The paper concludes that the incidence of the tax is on the consumer and VAT is not inflationary but a means of tax optimality to stabilize the system in the event of market failure.

scholarly journals Consequences for Non-Payment of PAYE and VAT Compared

2020 ◽  
Vol 23 ◽  
pp. 1-27
Author(s):  
Fareed Moosa
Keyword(s):  
South African ◽  
Value Added ◽  
Limited Range ◽  
Tax Administration ◽  
Value Added Tax ◽  
Agency Relationship ◽  
Criminal Sanctions ◽  
Legal Relationship ◽  
Legal Position ◽  
A Charge

This article shows that, whereas a bilateral legal relationship exists between the South African Revenue Service (SARS) and a vendor in relation to value-added tax (VAT), a tri-partite legal relationship exists among the SARS, employees and employers in relation to Pay As You Earn (PAYE). This article shows further that employers are, as withholding agents of PAYE, in the same legal position as vendors as regards VAT, namely, they are not in a trust or agency relationship with the SARS. Rather, this article argues that PAYE is in the nature of trust funds held by employers on behalf of employees from whose remuneration it is deducted. Since the employees retain ownership of the PAYE deducted, this article argues that employees have locus standi to lay a charge of theft against employers who misappropriate PAYE. Such a charge of theft is not grounded in tax administration. This article shows further that, as the law presently stands, a charge of theft falls outside the ambit of the remedies available to the SARS against employers and vendors who default in remitting PAYE or VAT. The Tax Administration Act, 2011 read with the Income Tax Act, 1962 and Value-Added Tax Act, 1991 codified only a limited range of criminal sanctions and administrative penalties that may be imposed against a defaulting employer or vendor. If theft is to be included, then a legislative amendment is required.

scholarly journals The Audit of Transactions with Customer-Owned Raw Materials in Foreign Economic Activities

2018 ◽  
Vol 80 (1) ◽  
pp. 77-84
Author(s):  
N. M. Proskurina
Keyword(s):  
Financial Reporting ◽  
Information Sources ◽  
Raw Materials ◽  
Value Added ◽  
Value Added Tax ◽  
Economic Activities ◽  
Work Arrangements ◽  
Primary Documents ◽  
Professional Opinion ◽  
External Auditor

The specifics of audit of the transactions with customer-owned raw materials in foreign economic activities (FEA) are shown. It is determined that FEA, being risky ones, need special attention from an external auditor. When scrutinizing such transactions, the latter need to be aware that when a FEA transaction is signed, including one for processing of customer-owned raw materials, the requirements of legal and regulatory acts being in force in Ukraine need to be duly considered. It is demonstrated the Custom Code of Ukraine regulates the work arrangements with customer-owned raw materials in FEA and specifies custom regimes for FEA transactions, with implications for their taxation. The taxation, in turn, is regulated by the Tax Code of Ukraine and has specifics in assessment and payment of value added tax and profit tax. The eligibility for tax credit on the commodities purchased and thereafter exported as raw materials in the custom regime of processing occur on general grounds specified in Section 5 “Value Added Tax” of the Tax Code of Ukraine, and the tax liabilities occur on the date when a customs cargo declaration is submitted for execution. According to Article 39 of the Tax Code of Ukraine, taxation of profits from transactions with related nonresident entities has some specifics. An example of the authors’ review of transactions with customer-owned raw materials in FEA, recording of the results of auditor procedures and the obtained evidences in working documents is given. The format of a working document is subject to professional opinion of an auditor. The test of recording transactions on processing of customer-owned raw materials beyond the boundaries of custom territory of Ukraine is proposed as a working document. The working document, intended to confirm the fact of collecting auditor evidences in order to form the auditor opinion on financial reporting, covers the content of transactions on processing of customer-owned raw materials, information sources for an auditor (primary documents, accounts records), audit procedures and their results, with the auditor’s opinion about the authenticity of recorded information (its confirmation). The working documents enable for regulation and quality assurance of audit procedures, and for unification of the auditor’s actions.

scholarly journals ISSUES & CHALLENGES OF APPLYING ISLAMIC BANKING IN ZANZIBAR: A WAY FORWARD

2020 ◽  
Vol 2 (4) ◽  
pp. 22-34
Author(s):  
Mzee, Mzee Mustafa ◽  
Ahmad Azam Othman
Keyword(s):  
Content Analysis ◽  
Comparative Method ◽  
Value Added ◽  
Islamic Banking ◽  
Journal Articles ◽  
Value Added Tax ◽  
Economic Activities ◽  
Legal Regime ◽  
Stamp Duty

The operation of Islamic banking in Zanzibar started in 2011 to boost economic activities and meet the demand of its people. However, the introduction of Islamic banking was not followed by any legal amendment to suit the operation of Islamic banking in the country as per Islamic principles. This paper, therefore, examines different laws which governed the Islamic banking in Zanzibar to find how far they support the operation of Islamic banking. The findings of this paper revealed that some of the laws in Zanzibar contain provisions that do not support Islamic banking transactions. The methodology adopted in this paper is based on the content analysis of legislations, leading textbooks, and journal articles. The study used a comparative method to address the study in question. The study recommends amendment of some laws such as the Contract Decree, 1917 and Transfer of Property Decree, 1917, Stamp Duty Act 2017, and Value Added Tax Act, 1998 for improving the legal regime governing Islamic banking transactions in Zanzibar.

scholarly journals Faktor-Faktor Untuk Meningkatkan Penerimaan Pajak Pertambahan Nilai Di Indonesia

2021 ◽  
Vol 13 (2) ◽  
pp. 130-145
Author(s):  
Setiadi Alim Lim
Keyword(s):  
Economic Crisis ◽  
Value Added ◽  
The Philippines ◽  
Tax Revenue ◽  
Value Added Tax ◽  
Economic Activities ◽  
Tax Rate ◽  
Goods And Services ◽  
Tax Revenues ◽  
The Government

In the current era of the economic crisis caused by the Covid-19 virus pandemic, the performance of tax revenues worldwide is declining. Indonesia's tax revenues in 2020 experienced a significant decline, including Value Added Tax receipts which decreased by 14.89% compared to 2019. This study shows that in the current situation there are factors that support and hinder the increase in Value Added Tax revenues. Factors that support the increase in Value Added Tax revenue include: an increase in the fiscal deficit, a decrease in imports, a longstanding Value Added Tax, and the efficiency of tax administration by the government. Meanwhile, the factors that hindered the increase in Value Added Tax revenue were: negative Gross Domestic Product growth, decreased service consumption, decreased C-Value Added Tax efficiency. To increase the value added tax revenue, it is better not to increase the Value Added Tax rate, because most countries in ASEAN use a tariff of 10% or less, except in the Philippines where the rate is 12%. If the rate of Value Added Tax is still increased, the maximum is not more than 12%, and it is temporary in nature for now and will be returned to the original rate or lower after the economic crisis era has passed. Expansion of the object of Value Added Tax can be done, among others, by reducing goods and services that are exempt from the imposition of Value Added Tax, which are facilities freed, are not collected, and are borne by the government. If there is an expansion of the object of the imposition of Value Added Tax, then it should be done very selectively and not to be counterproductive by still giving exceptions to basic necessities that are needed by the community and services that have social objectives or based on international rules are exempt from being imposed. It is also hoped that the reduction in the number of exempt goods and services will not interfere with the economic activities of the community, let alone cause unrest in the  community. 

scholarly journals Specific Features of Counteracting VAT Evasion: Experience of Ukraine and Foreign Countries

2020 ◽  
Vol 91 (4) ◽  
pp. 121-129
Author(s):  
N. S. Horobets
Keyword(s):  
Tax Evasion ◽  
Value Added ◽  
The State ◽  
Document Management ◽  
The European Union ◽  
Value Added Tax ◽  
Economic Activities ◽  
Economic Decision Making ◽  
Foreign Countries ◽  
Crime Types

The article is focused on determining specific features of counteracting VAT evasion in Ukraine and foreign countries. It has been found out that the presence of VAT in the tax system of any state is a prerequisite for such a state to become a member of the European Union and it is due to its broad tax base and more neutral impact on economic decision-making on investment and consumption issues. It has been noted that the joint search by the states for the ways to combat VAT evasion is due to the need to minimize the damage caused to the financial and economic interests of the state by such actions, to increase the efficiency of value added tax, to increase the competitiveness level of domestic producers, to stimulate priority economic activities in the state. The content of value added tax as an indirect tax in accordance with the provisions of scientific doctrine has been revealed. Specific features of legal and illegal (tax crime) types of VAT evasion have been studied. The list of the methods to evade value added tax in Ukraine and foreign countries has been provided. The specifics of general and special ways to counteract this action have been revealed. The emphasis has been placed on such methods of counteracting VAT evasion as enshrining legal liability for VAT evasion at the legislative level; exercising tax control over the entities that are registered as value added taxpayers; usage of electronic document management and other opportunities of the digital economy, which allows to identify risks in the activities of taxpayers during their initial registration, etc. It has been concluded that there is no unified approach to the implementation of counteraction to value added tax evasion by state-authorized agencies; and the emphasis has been placed on the feasibility of existence of a basic list of the methods to counteract value added tax evasion.

On the Future of the Financial Redistribution across Member States in the EU

2006 ◽  
Vol 56 (1) ◽  
pp. 1-43
Author(s):  
Sándor Richter
Keyword(s):  
Value Added ◽  
The Other ◽  
Current Debate ◽  
Member States ◽  
New Member States ◽  
Financial Position ◽  
Cross Member ◽  
Expenditure Structure ◽  
The Eu ◽  
Made In

The order and modalities of cross-member state redistribution as well as the net financial position of the member states are one of the most widely discussed aspects of European integration. The paper addresses selected issues in the current debate on the EU budget for the period 2007 to 2013 and introduces four scenarios. The first is identical to the European Commission's proposal; the second is based on reducing the budget to 1% of the EU's GNI, as proposed by the six net-payer countries, while maintaining the expenditure structure of the Commission's proposal. The next two scenarios represent radical reforms: one of them also features a '1% EU GNI'; however, the expenditures for providing 'EU-wide value-added' are left unchanged and it is envisaged that the requisite cuts will be made in the expenditures earmarked for cohesion. The other reform scenario is different from the former one in that the cohesion-related expenditures are left unchanged and the expenditures for providing 'EU-wide value-added' are reduced. After the comparison of the various scenarios, the allocation of transfers to the new member states in terms of the conditions prevailing in the different scenarios is analysed.

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