VAT muddle

Readers' Views No 296, Q3 2013
OECD Observer

The idea of a "single rate system" as espoused here (VAT's next half century: Towards a single-rate system? No 284, Q1 2011) shows that the author–for that matter the entire OECD–needs to know certain facts.

In a VAT medium, VAT is not an "output" tax. VAT must have its own rate and output tax must have its own separate one. For example, if output tax rate is 10%, then a VAT rate of 1% must be stipulated. This 1% must apply to flat rate business operators and [0.1%] for non-flat rate operators. Anybody who does not understand this must visit

—George Bobylin Ahu, posted on

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©OECD Observer No 296, Q3 2013

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