StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

VAT Tax - Theory of Levying - Assignment Example

Cite this document
Summary
The paper “VAT Tax - Theory of Levying” looks at Value-Added Tax, which is a tax on the sale or import of goods. It is paid on the acquisition of raw material and other goods from domestic suppliers. The main advantage of VAT is the cascading type tax…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER94.5% of users find it useful
VAT Tax - Theory of Levying
Read Text Preview

Extract of sample "VAT Tax - Theory of Levying"

Download file to see previous pages

India and the US, two of the democracies of the world, don't have a VAT system because the idea behind the VAT is system is a tax to end all taxes, but other countries that have VAT don't levy entry or luxury duty. If the prices of stock transfer goods increase then the impact of the VAT system would be, the "Denial of a tax credit in respect of inter-state stock transfers will prejudice investment in less developed states or states with relatively small 'internal' markets." Then every state government with the VAT system would have a draft law that wouldn't allow VAT already paid off elsewhere.

Tax experts now state that the price of consumer goods is increasing by 15-20%. The ministry of finance and state admin of tax posted a notice about the increase in electronically products in 1998, which caused the VAT to increase from 9% to 11%. The VAT rate for textiles is 15%, for the sale/import of most goods is 17%, and 13% for vegetable oil, natural gas, and chemical fertilizer. An organization that makes taxable goods have a 7% tax (inclusive of government taxes), this is the majority of businesses.

Some goods have a 0% VAT, in this case, the supplies do not collect the tax, but can put a recovery on its input tax. Some 0% VAT items are:Exported goodsServices provided in locally but used overseasServices of international transportation by air and sea. Ministry, Department, Local Government or public enterprises salesSale of goods and services to the United Nation Sale of goods and services from one warehouse or enterprise to another. The taxpayers' net tax is calculated and the beginning of each month that credits the amount of VAT paid on inventories, capital goods or raw materials that were for sale or in the process of consumption during the on the versus the total amount of VAT due on for the goods or services in the same months.

(Input Tax vs. Output Tax). What are VAT exemptionsThere are 10 categories that are excluded from the VAT tax, but keep in mind that a trader under any of these exemptions can't use input tax credits. Some exemptions are as follows: small entrepreneurs, unprocessed farm products (fertilizer, pesticides, etc), newspapers, magazines, textbooks, domestic and international transport, health and educational and medical services, libraries and museum services, religious services and charityTax InvoiceThe VAT-payers have to issue tax invoices to show the details of the value of goods sold.

An invoice is necessary because it is evidence of input tax for the taxpayers that buy goods. A tax invoice consists of:An obvious mention of 'TAX INVOICE' on the paperthe name, address, and tax identification number of the issuer; and the purchaser The serial numbers of the tax invoice and the tax invoice book the type, category, quantity, and value of the goods. This is similar to an income tax. These tax sales and deducts on capital goods. Only Argentina, Peru and the State of Michigan use this.

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(VAT Tax - Theory of Levying Assignment Example | Topics and Well Written Essays - 750 words, n.d.)
VAT Tax - Theory of Levying Assignment Example | Topics and Well Written Essays - 750 words. Retrieved from https://studentshare.org/sociology/1529130-vat-tax-theory-of-levying
(VAT Tax - Theory of Levying Assignment Example | Topics and Well Written Essays - 750 Words)
VAT Tax - Theory of Levying Assignment Example | Topics and Well Written Essays - 750 Words. https://studentshare.org/sociology/1529130-vat-tax-theory-of-levying.
“VAT Tax - Theory of Levying Assignment Example | Topics and Well Written Essays - 750 Words”. https://studentshare.org/sociology/1529130-vat-tax-theory-of-levying.
  • Cited: 0 times

CHECK THESE SAMPLES OF VAT Tax - Theory of Levying

Increased Taxation in the USA

The paper "Increased Taxation in the USA" underlines that the increase in tax rates and prices in the light of the economic theory of taxation, i.... a theory of tax compliance, suggests that consumer behaviour can be altered if equal tax is levied on all the homogeneous products.... Theoretical analysis of increased taxation leading to price change with the help of the economic theory of taxation illustrates that consumers' behaviour can be altered if all the similar products are taxed and certain incentives are introduced for the manufacturers to support the government's measures....
7 Pages (1750 words) Essay

Doing Business in Russia

Depending on the company's location, the tax can vary.... The thorough tax code has recently been implemented including a new VAT law and a new profits tax law.... The new Profits tax law is lowering the tax rate to a maximum of 24 % and reduced the number of non-deductible expenses.... The vat is quite similar to the EU model; however, input vat is only recoverable when paid whereas output vat can be accrued on a cash or accrual basis....
12 Pages (3000 words) Research Proposal

The Theory of Optimal Capital Structure

The paper "The theory of Optimal Capital Structure" highlights that generally, loans will not be disbursed to a firm with poor credit ratings and the firm would need to do equity financing to raise capital; this would lead to a low debt-equity ratio.... Trade-off theory: Maximum debt can be raised when the share price is at its maximum.... Signalling theory: This theory states that when the firm issues bonds for debt financing, it sends out a positive signal in the market....
7 Pages (1750 words) Coursework

Tax System and the UK Government

Before investors make an investment plan, they identify the tax system of their investment location.... A tax system that is negatively designed does not favor the investor's interests and will drain their resources and time.... Generally, this paper will look at UK tax system and also recommendations made in the Mireless review.... The United Kingdom's tax rate is among the highest in the world.... Despite people earning high incomes, they have been subjected to high tax rates hence little savings by the income earners....
10 Pages (2500 words) Assignment

Social Desirability and Effectiveness of a Fat Tax

Some focus on levying high sugar foods, while others focus on fat saturation or the cholesterol content.... This paper asserts that fat tax yields unintended consequences by impacting consumers differently in reference to regression effect, and there are challenges in altering consumer dietary behavior.... Fat tax alone is an insufficient measure to solve the problem of obesity in any country.... Recently, most governments, especially in America, Europe and parts of Asia have or are considering implementing high tax policies on junk food....
10 Pages (2500 words) Essay

The Monetary and Fiscal Policy in the UK

The paper "The Monetary and Fiscal Policy in the UK" highlights that the objective of the Bank of England Bank's monetary policy is to maintain the value of the currency and to provide a framework for non-inflationary economic growth by controlling the interest rate.... hellip; The Bank's regulatory functions passed to the Financial Services Authority” (Background, 2005)....
13 Pages (3250 words) Case Study

Basic Characteristics of Tax System

"Basic Characteristics of tax System" describes the tax system that focuses on the revenues, which a country holds and receives.... It was till 1980 the tax system in many major countries witnessed certain risks in areas such as deciding the inflation rates, exchange rates, shares, etc.... nbsp;… The tax system also differs according to gender.... nbsp; The tax system consists of the following features such as different types of taxes, collection of revenues in terms of variation in the percentage of money, etc....
6 Pages (1500 words) Article

Is it Correct for Successive Governments to Manipulate the Personal Taxation System for Economic Purposes

The paper "Is it Correct for Successive Governments to Manipulate the Personal Taxation System for Economic Purposes" states that in the UK, the tax department has centralized the business rates.... Individual income taxes often tax the total income of the individual (with some deductions permitted), while corporate income taxes often tax net income (the difference between gross receipts, expenses, and additional write-offs)” (Balachandran 2010, p....
16 Pages (4000 words) Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us