Value-added tax (VAT) dominates tax systems around the world. But should every country have a VAT? Is VAT always as good as it could be in economic, equity and administrative terms? In developing and transitional countries the answers to such questions are critical to stability, growth and development. VAT is a critical fiscal tool in most countries. But VAT can sometimes be better designed and almost always better administered. The key questions that must be answered in designing and implementing VAT are essentially the same in all countries. But different tax designs may best suit different countries facing different circumstances. This book reviews experiences with VATs around the world and assesses how the choice of particular design features may affect outcomes in particular contexts.
• Comprehensive treatment of the major aspects of the most important tax in most developing and transitional countries • Based both on a thorough review of the literature and the extensive field experience of the authors • Clearly written in non-technical language with many real-world illustrations
1. Why this book?; 2. The rise of VAT; 3. Is VAT always the answer?; 4. Trade and revenue; 5. Equity and the informal sector; 6. What should be taxed?; 7. Key issues in VAT design; 8. New issues in VAT design; 9. Administering VAT; 10. Dealing with difficulties; 11. The political economy of VAT; 12. Where do we go from here?
'This is a much needed book that reviews and evaluates the world's collective wisdom and experience on the design and, no less important, the operation of the VAT – the most important fiscal innovation of the last half-century. It provides a 'state of the art' survey and commentary on the extensive writings, both published and unpublished – hundreds of articles, books and papers are cited – that have appeared over the span of the last 40 years. In addition, the book incorporates a wealth of hands-on experience by the authors in countries as diverse as Egypt, Colombia, Ukraine, Jamaica, Mexico, Argentina and many others.' Sijbren Cnossen, University of Maastricht
'This is a rich and elegant book on a rich and (if we are to understand it properly) inelegant topic. It sets out some key issues and challenges in what remains a largely untrodden area. Perhaps the VAT is finally starting to get the attention it deserves.' Michael Keen, Journal of Economic Literature
'Richard M. Bird and Pierre-Pascal Gendron are leading VAT scholars and this book is a great addition to the VAT literature. It is well researched and elegantly written, and certainly deserves a prominent place on the bookshelves of students, scholars, and policy makers.' Jinyan Li, Canadian Tax Journal
'The VAT in Developing and Transitional Countries … provides a readable, comprehensive, and thoughtful summary of the critical issues related to adopting and operating the value added tax (VAT) in developing and transitional economies. … [It] is a valuable addition to the library of anyone interested in tax design, public administration, or development in general.' Victoria Perry, Finance and Development
'In this book the authors combine a wealth of experience with actual VATs with crystal-clear analytical reasoning to address the main problems in VAT implementation and, without any shyness, suggest sensible solutions that depend on the environment. This impressive work should be on the bookshelf of any policymaker who must deal with the real world of tax policy, and of any scholar or student who wishes to learn about that world. It is destined to be the standard reference on VAT for years to come.' Joel Slemrod, University of Michigan
'This book provides a wealth of information on the tax that is the world's most widely used consumption-based revenue instrument. It carefully analyzes in one clearly and concisely written volume the latest advances in the theoretical, empirical and administrative literatures on the VAT. Who knows, it might even help prod US policymakers into giving the VAT the serious consideration it deserves.' George Zodrow, Rice University