Book contents
- Frontmatter
- Contents
- List of Tables
- Preface
- 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?
- Annex
- References
- Index
9 - Administering VAT
Published online by Cambridge University Press: 16 November 2009
- Frontmatter
- Contents
- List of Tables
- Preface
- 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?
- Annex
- References
- Index
Summary
VAT is as VAT does. The way VAT is administered determines its effects. A full discussion of all aspects of VAT administration would require a separate book. All we can do in this and the next chapter is to highlight a few issues that experience suggests are important in developing and transitional countries. In Chapter 3 we asked whether every country needed a VAT. We almost – though not quite – answered yes to this question. It thus seems appropriate to begin the discussion of VAT administration by saying a few words about the way a country that previously has not had a VAT should launch one.
LAUNCHING VAT
Experts tell us that a preparatory period of between 18 and 24 months is necessary to set up a VAT (Tait 1988). Experience confirms that this advice is reasonable. Some countries that have tried to move to a VAT more quickly have paid a substantial price for their haste and have found it difficult subsequently to get it right. On the other hand, experience also suggests that too long a preparation period may sometimes be costly. Since the window of opportunity to introduce major tax changes may be open only for a short time, countries adopting a VAT must sometimes take what may be called the ‘big bang’ approach. VATs introduced too quickly have not always worked out well, of course, and that is why experts so often emphasize the desirability of following the normal schedule mentioned.
- Type
- Chapter
- Information
- The VAT in Developing and Transitional Countries , pp. 161 - 175Publisher: Cambridge University PressPrint publication year: 2007