Consumption Tax Reform
Asian Tax Journal Vol. 7 No. 3 (2006), pp. 335-362
Abstract
The increasing portion of consumption related tax base is one of the major trends of tax reform in the recent world. Theoretically it is hard to compare the advantages of direct taxes and indirect taxes. But if any nation has a strong fiscal demand and she has to finance it with tax revenue, the VAT will be certainly one of the best candidates. In any case the economic effects of increasing VAT rate must be seriously considered. In fact our VAT exemption areas are broader than OECD standard. But the individual OECD countries as England and France have also far different positions from OECD standard. If we compare our position with broad zero rated areas of England and reduced rated goods and services of other OECD countries, we can hardly argue that our VAT exemption areas are broader than that of those countries. Our concern for the regressive character of VAT burden distribution is not so sufficient.
Keywords
- tax structure
- VAT
- fiscal demand
- exemption
- OECD Standard
- zero rate
- reduced rate
- regressive VAT burden
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