ROLE OF VAT IN CURRENT ECONOMIES CA. RAJENDRA KUMAR P Contact No: +91 9382303403 / 9444017087 Email Id: [email protected].
Download ReportTranscript ROLE OF VAT IN CURRENT ECONOMIES CA. RAJENDRA KUMAR P Contact No: +91 9382303403 / 9444017087 Email Id: [email protected].
Slide 1
ROLE OF VAT IN
CURRENT ECONOMIES
CA. RAJENDRA KUMAR P
Contact No: +91 9382303403 / 9444017087
Email Id: [email protected]
Slide 2
ROLE OF VAT IN CURRENT ECONOMIES
Given the option, none of us would like to pay taxes
But two things are always certain – Taxes and Death
Taxes are of various kinds - principally two i.e., Taxes on
Income and Taxes on Consumption
Slide 3
ROLE OF VAT IN CURRENT ECONOMIES
Consumption taxes are the most ancient. Their presence
can be found in Chanakya’s Arthasashtra – 300 B.C.
Taxes have inspired revolts. Ex: The Boston Tea Party,
The Whisky Tax and in India – The Salt Satyagraha
Consumption taxes have also influenced political
changes
Consumption tax, VAT, GST all are one and the same
Slide 4
ROLE OF VAT IN CURRENT ECONOMIES
Generally,
VAT
is neutral - It does distinguish between the rich
and the poor
VAT
No
does not tax the savings
distortion of spending habits
Welfare States now rely more on VAT
Slide 5
ROLE OF VAT IN CURRENT ECONOMIES
Economists and Tax Experts favour consumption taxes
for economic growth
The modern form of VAT was introduced in France
[European Union] in 1954
In 1995, the VAT receipts of EU was around 10% and
it rose to around 31% by 2012
Ageing societies like Japan look towards VAT as
potential revenue generation
Slide 6
ROLE OF VAT IN CURRENT ECONOMIES
The cost of collection of VAT has always been a
challenge
VAT is a tax on consumption and not business.
Hence, compliance cost is a major administrative
burden
Attractive VAT rates promote attractive investments
Slide 7
ROLE OF VAT IN CURRENT ECONOMIES
Exemptions are contrary to VAT principles
VAT aims at neutrality
Reverse Charge
20% of the world’s tax revenue is now raised through
VAT
Implementing pure VAT in Federal economies like
Brazil, India and Canada
Slide 8
ROLE OF VAT IN CURRENT ECONOMIES
Rs.1,37,355 Crores
Non Tax Revenue
16%
84%
Rs.741877 Crores
Tax Revenue
Slide 9
ROLE OF VAT IN CURRENT ECONOMIES
This chart shows that the share of Indirect Taxes towards the
total tax revenue earned by the government is around 64%
Other
Rs.2,67,395
Slide 10
THANK YOU
ROLE OF VAT IN
CURRENT ECONOMIES
CA. RAJENDRA KUMAR P
Contact No: +91 9382303403 / 9444017087
Email Id: [email protected]
Slide 2
ROLE OF VAT IN CURRENT ECONOMIES
Given the option, none of us would like to pay taxes
But two things are always certain – Taxes and Death
Taxes are of various kinds - principally two i.e., Taxes on
Income and Taxes on Consumption
Slide 3
ROLE OF VAT IN CURRENT ECONOMIES
Consumption taxes are the most ancient. Their presence
can be found in Chanakya’s Arthasashtra – 300 B.C.
Taxes have inspired revolts. Ex: The Boston Tea Party,
The Whisky Tax and in India – The Salt Satyagraha
Consumption taxes have also influenced political
changes
Consumption tax, VAT, GST all are one and the same
Slide 4
ROLE OF VAT IN CURRENT ECONOMIES
Generally,
VAT
is neutral - It does distinguish between the rich
and the poor
VAT
No
does not tax the savings
distortion of spending habits
Welfare States now rely more on VAT
Slide 5
ROLE OF VAT IN CURRENT ECONOMIES
Economists and Tax Experts favour consumption taxes
for economic growth
The modern form of VAT was introduced in France
[European Union] in 1954
In 1995, the VAT receipts of EU was around 10% and
it rose to around 31% by 2012
Ageing societies like Japan look towards VAT as
potential revenue generation
Slide 6
ROLE OF VAT IN CURRENT ECONOMIES
The cost of collection of VAT has always been a
challenge
VAT is a tax on consumption and not business.
Hence, compliance cost is a major administrative
burden
Attractive VAT rates promote attractive investments
Slide 7
ROLE OF VAT IN CURRENT ECONOMIES
Exemptions are contrary to VAT principles
VAT aims at neutrality
Reverse Charge
20% of the world’s tax revenue is now raised through
VAT
Implementing pure VAT in Federal economies like
Brazil, India and Canada
Slide 8
ROLE OF VAT IN CURRENT ECONOMIES
Rs.1,37,355 Crores
Non Tax Revenue
16%
84%
Rs.741877 Crores
Tax Revenue
Slide 9
ROLE OF VAT IN CURRENT ECONOMIES
This chart shows that the share of Indirect Taxes towards the
total tax revenue earned by the government is around 64%
Other
Rs.2,67,395
Slide 10
THANK YOU