Why does vat exist

You may however authorize your bank to pay the tax through a direct credit transfer to the Commissioners account at the Central Bank of Kenya. Penalty on late filing: Whichever is higher between, Kshs. Imported services are services provided by non-resident persons who are not required to register for VAT in Kenya. The importer must register for a KRA PIN to be able to generate an e-slip payment slip via iTax and use it to pay the tax using the preferred mode of payment.

Many countries exclude certain products or services from VAT, such as food, medicine or other necessities, said Kopczuk. There may be inconsistencies among excluded products, creating a burden for some businesses. Moreover, there are cases of tax evasion, particularly for cross-border purchases when someone receives a tax credit for VAT paid outside their home country. There are also instances of companies creating phony invoices to claim VAT credits for purchases along the supply chain that never happened, he said.

Some Democrats see the VAT as regressive because it hits families regardless of income, whereas Republicans may fight a broad-based tax increase, he said. Plus, it may also be a tough sell to lawmakers in states without a sales tax, Bunn added. Skip Navigation. Key Points. Value-added tax, known as VAT, is a levy on goods and services at each stage of the supply chain. VATs are the third-largest source of revenue for other member countries in the Organisation for Economic Co-operation and Development.

By implementing GST on goods and services, the economy is improving through the elimination of the cascading system of tax and streamlining the business process in India. Thank you for your response.

The 1 GST billing solution for your business Create, edit, share invoices on- the-go Also available on web. Download Free. Invoice creation in 30 seconds Create, edit, share invoices on-the-go Convert invoices to e-Way bills and more. Start Matching.

Was this article helpful? Have a query? ITR Resources. Mutual Fund Resources. Terms Privacy Legal.