Value Added Tax :: Economy, Government

Value Added Tax or tub as it is called is the most common alternative strategy employ by many countries to deal with inefficiencies deep down the tax clay. ad valorem tax provides an opportunity to modernize the indirect tax system, to agnize it more efficient, appropriate and simpler.Value added tax ( ad valorem tax), is a final spending tax levied on value added or mark up on a good or service, at each and every item of the production and distribution chain. Value Added is the value that a line of business adds to its cutting materials or purchases before selling the good/service. It is the mark up on that cost price.Vat is a modern tax. It was first introduced in France in 1948. Currently it is implemented in over 100 countries around the serviceman including the Caribbean. In 1948, France implemented it at the manufacturing level only. In 1967, Brazil implemented it at all levels and by the 1970/80s, tub was implemented in 63 countries.According to information gathered from the VAT implementation office, in the Caribbean, VAT is soon in operation in Haiti(1982), Dominican Republic(1983), Trinidad and Tobago(1990), Jamaica(1991), Barbados(1997), Belize(2006), Dominica(2006), Guyana(2007), Antigua and Barbuda(2007) and St. Vincent(2007). VAT is currently creation introduced/considered in St. Lucia and St. Kitts. It is being re-introduced in Grenada.Discussions on a VAT system, in St. Lucia, started as far back as 2003, from the recommendations of the Tax rectify and Administration Commission of the ECCU, as a strategy to manage the miscellaneous indirect taxes. This was followed in the 2007 budget address by the late Sir bottom Compton where he indicated the intention to introduce a Value Added Tax system in St. Lucia.According to information gathered from the VAT Implementation get word office VAT will not be an additional Tax. VAT is a switchment tax for some of the indirect taxes, currently being collected by the Inland Revenue Department and the Customs and walk out Department. Thus, VAT will not change the direct taxation system. It will, however, replace or reduce a number of indirect taxes. Since VAT and aspiration Tax cannot operate together, VAT will replace Consumption Tax.In order to charge VAT, a business must meet a Threshold. The threshold will be the minimum annual sales aggregate ($) for a business. These businesses must register with the VAT Office. Under VAT, registered businesses are called taxpayers. With VAT, business entities are categorized into two groups registered businesses and unregistered businesses. Registered businesses includes individuals, partnership, companies or other entities who put out goods and services in the courses of business- they pay VAT on purchases charge VAT on sales and can claim input tax credit.