Deficiencies in Value Added Tax (VAT) systems
Prepared by the ICC commission on :
Taxation
Publication date : 05/03/2004
Since the 1960s, the contribution of general consumption taxes to the tax revenues of the OECD Member States has grown from about 12% to 18%. With the exception of the USA, all OECD Member States – and many non-OECD countries – apply a VAT type consumption tax, levied throughout the production and distribtion chain of goods and services.
Mobility and globalization have led to an increase of cross-border transactions of goods and services. As a result, deficiencies in national consumption tax systems have become major obstacles for enterprises engaged in international business and may lead to double or non-taxation.
Through this statement on deficiencies in VAT systems, ICC wants to emphasize the need for improving national VAT systems in order to abolish the obstacles caused by deficiencies in these systems. The last paragraph of the paper includes a summary and recommendations. The basic principles of consumption taxes are explained in the Annex to this paper.
For further information, please contact
Camilla PAGNETTI
Policy Manager , Taxation, Custom & Trade Facilitation
Tel:
+33 (0)1 49 53 28 53
camilla.pagnetti@iccwbo.org